LIVESTOCK-CME live cattle retreat on pre-weekend profit-taking

Chicago Mercantile Exchange live cattle futures weakened on Friday as the market retreated from contract highs hit this week.

Profit-taking weighed on futures prices, though the market remains supported by strong demand for cattle from meatpackers, traders said.

Packers like Tyson Foods and JBS USA slaughtered an estimated 120,000 cattle on Friday, up 5.3% from a week ago and 12.1% from a year ago, the U.S. Department of Agriculture said.

“We’ve rallied here for a couple weeks now,” a commodities broker said. “Really the strength comes from the increased slaughter pace.”

April live cattle ended 0.700 cents lower at 146.175 cents per pound, after rising on Thursday to a contract high of 148.700 cents. March feeder cattle closed 0.500 cent lower at 166.225 cents per pound.

Beef processors’ profit margins were $268.60 per head of cattle, compared to $298.45 per head on Thursday and $371.75 per head a week ago, said Denver-based livestock marketing advisory service LLC.

“They’re going to kill as many as they possibly can with those type of margins,” the broker said.

Choice cuts of boxed beef fell by 30 cents to $274.52 per cwt, while select cuts dropped by $1.12 to $267.83 per cwt, the USDA said.

In the pork market, wholesale cutout values jumped, with the carcass value up by $8.48 per hundredweight, the USDA said.

Still, CME April lean hog futures pulled back to settle 1.200 cents lower at 102.225 cents per pound. The contract on Thursday set a contract high of 107.700.