Chicago/Reuters – Chicago Mercantile Exchange live cattle closed higher on Thursday, driven by short-covering after wholesale beef prices ended their recent downtrend, traders said.
Thursday morning’s wholesale price for choice beef rose 85 cents per hundredweight (cwt) from Wednesday to $251.67. Select beef jumped $1.90 to $244.76, according to the U.S. Department of Agriculture.
“You are getting an extended grilling season out of this benign El Nino summer,” said Mike Zuzolo, president of Global Commodity Analytics.
Typically, consumers eat less heavy meals during hot summer weather.
Fewer cattle being slaughtered, with packers cutting kills because of generally tight supplies, helped lift wholesale beef prices, traders and analysts said.
CME live cattle investors were still digesting Wednesday’s market-ready or cash cattle prices that had declined less than expected.
Cash cattle in Texas and Kansas fetched mostly $155 per cwt, down $1 from last week, said feedlot sources. Cash cattle in Nebraska moved at $156 to $157, steady to $1 higher than a week ago, they said.
Packers needed slaughter-ready cattle after not buying as many of them in recent weeks in anticipation of a seasonal increase in supplies that has yet to materialize.
CME live cattle garnered more support from their discounts to this week’s cash prices. Fund buying contributed to futures advances after nearby contracts broke through moving average resistance levels.
Traders wait to see whether Thursday’s market gains will hold on Friday when some investors might pocket profits before the weekend.
August live cattle finished 2.975 cents per lb higher at 150.650 cents and above the 20-day moving average of 150.24 cents.
October ended 2.400 cents higher at 153.700, and above where the 10-day and 20-day moving averages converged at 153.26 cents.
CME feeder cattle closed higher on buy stops and live cattle futures buying.
August closed up 1.775 cents per lb at 211.600 cents, and September 1.850 cents higher at 212.350.
CASH JITTERS HIT HOG FUTURES
CME hogs posted losses, pressured by weaker cash prices as heavy hogs continue to help ease production losses pegged to the deadly pig virus on U.S. farms, traders said.
Packers recently lowered hog bids to improve their margins and counter tight supplies, which lifted the pork cutout price to an all-time high.
USDA’s morning direct hog price data was unavailable. Cash hogs earlier on Thursday traded steady to $1 per cwt lower than Wednesday, Midwest hog dealers said.
USDA’s data showed the morning’s wholesale pork price, or cutout, up $1.92 per cwt to a record $137.81.
August ended down 1.675 cents at 128.850 cents, and October at 113.725, 1.350 cents lower.