CHICAGO, April 13 (Reuters) – Live cattle futures fell on the Chicago Mercantile Exchange on Monday as traders booked profits after the market set life-of-contract highs last week, traders said.
Prices had climbed recently on strong cash markets, tight cattle supplies and robust consumer demand for beef.
“We are seeing some short-term profit-taking after the really big run-up over the last two weeks or so,” said Dan Norcini, an independent livestock trader.
Most-active CME June live cattle sagged 0.675 cent to close at 248.525 cents per pound after reaching a contract high of 249.950 cents on Friday.
The thinly traded April contract also eased after rising on Friday to 252.250 cents, an all-time high on a continuous chart of the front live cattle contract.
The setback could make futures look attractive to investors who think that prices could still rise further, traders said.
“Cattle are technically overbought, so that brings on this short-term profit-taking by longs,” Norcini said. “But dip buying seems to be the ongoing strategy in there as numbers remain tight and beef demand should begin to pick up as we move deeper into the spring.”
The U.S. cattle supply has dwindled to its lowest level in 75 years after ranchers increasingly sent livestock to slaughter, instead of keeping them for breeding, because of high prices and a drought that burned up grazing lands.
CME May feeder cattle futures rose 0.475 cent to 372.825 cents per pound and touched their highest price since October.
Wholesale beef prices also increased. The U.S. Department of Agriculture reported choice beef cuts at $381.92 per hundredweight, up $1.02 from Friday, and select cuts at $383.64 per hundredweight, up $2.30.
Meatpacker JBS reached a labor agreement with union workers after a three-week strike disrupted operations at a massive beef plant in Greeley, Colorado, the company and union representing the workers said.
In other news, CME lean hog futures closed lower for a fifth consecutive session. The benchmark June contract slipped 0.600 cent to 103.125 cents per pound.
USDA quoted the wholesale pork carcass cutout at $99.14 per cwt, up $0.44 from Friday.
(Reporting by Tom Polansek; Editing by Vijay Kishore)
