Chicago Mercantile Exchange live cattle futures closed lower on Thursday, erasing most of Wednesday's gains, pressured by profit-taking and caution while awaiting remaining cash prices, traders said.
Technical selling contributed to market losses ahead of the U.S. Department of Agriculture's monthly Cattle On Feed report on Friday, traders said.
USDA will simultaneously publish the mid-year U.S. cattle inventory report.
August ended 1.400 cents per pound lower at 115.875 cents and below the 10-day moving average of 116.175 cents. October finished down 1.800 cents lower at 117.075 cents.
Market-ready, or cash, cattle at Wednesday's Fed Cattle Exchange brought $118 to $118.50 per cwt versus $117 to $118.75 a week earlier.
Bids for unsold market-ready, or cash, cattle in the U.S. Plains held at $115 to $117 per cwt against $120 to $122 asking prices, said feedlot sources.
Market bulls expect unsold cattle to go for around $119 per cwt based on near-term tight supplies and still profitable processor margins.
Bearish investors cited seasonally sluggish wholesale beef and the outlook for increased supplies ahead for possible weaker cash returns.
"The cash market has been fairly resilient, but we're going to get into bigger numbers coming into mid-August," said Vetterkind Cattle Brokerage president Troy Vetterkind.
CME feeder cattle closed sharply lower following profit-taking, higher corn prices and live cattle futures selling.
August feeders ended 2.225 cents per pound lower at 152.275 cents.
Hog Market Ends Lower
Thursday morning's weaker wholesale pork values and downward-trending cash prices pared Wednesday's CME lean hog advances, said traders.
August futures succumbed to technical selling after investors sold that contract and at the same time bought deep-deferred trading months.
August closed 1.475 cents per pound lower at 81.100 cents, and below the 40-day moving average of 81.182 cents. October ended down 0.950 cent to 67.850 cents.
Ample supplies dropped cash hog prices for a fifth consecutive session, a trader said. Thursday's record-high pork belly price at $214.41 per cwt minimized the decline in the overall wholesale pork value, he said.
Scant pork belly inventories are behind the surge in product prices at wholesale, but demand will likely diminish once those wholesale prices push retail bacon higher, an analyst wrote in his newsletter to clients.