Chicago Mercantile Exchange live cattle futures closed higher on Friday aided by short-covering ahead of the May 25 to May 27 U.S. Memorial Day holiday weekend, traders and analysts said.
CME live cattle gained one per cent for the week despite weaker cash cattle and wholesale beef prices.
June cattle ended at 120.575 cents, 1.45 cents per pound higher, and August ended up 1.025 cents at 119.225 cents (all figures US$).
“It was quiet before the holiday with short-covering the main feature,” a trader said.
“This week’s disappointing cash trade is behind us, so people are going to see what’s next for cash after they return Tuesday from their vacations,” he said.
Cash cattle this week fetched $124 to $125.50 per hundredweight (cwt), compared with $124 to $126.50 last week, feedlot sources said.
U.S. Department of Agriculture data on Friday morning quoted the wholesale price of choice beef, or cutout, down $1.44 at $209.93/cwt. It dropped below Thursday’s fresh record high of $211.37.
Packers needed fewer cattle, with plants scheduled to be closed on Monday for the holiday. And grocers are not expected to book more meat until they determine how much product moved during the three-day holiday weekend.
Next week, processors may raise cash cattle bids while buying animals for the following week — the first full slaughter week after the holiday, analysts and traders said.
CME feeder cattle rose on pre-holiday short-covering and the higher live cattle market.
Feeder cattle futures for the week finished up 7.9 per cent. It was their biggest weekly increase since the week ended May 3, 1996, at 10.7 per cent.
This week’s percentage change seems large after May futures expired on Thursday at 131.625 cents, which was a sizeable discount to the new lead month August, a trader said.
August settled at 144.55 cents, up 1.9 cents, and September finished 1.725 cents higher at 146.675 cents.
Hogs up with cash hope
CME hogs climbed in anticipation of higher cash hog and wholesale pork prices following Monday’s holiday, traders and analysts said.
Processors will need more hogs to accommodate what is expected to be a big Saturday slaughter to make up for Monday’s holiday downtime, a trader said.
And high-priced beef may prompt some shoppers to switch to relatively inexpensive pork, he said.
The government’s Friday afternoon mandatory wholesale pork price, or cutout, calculated on a plant-delivered basis was $94.42/cwt, up 14 cents from Thursday.
Friday afternoon’s USDA data showed the average hog price in the most-watched Iowa/Minnesota market at $90.21/cwt, down 11 cents from Thursday.
CME lean hogs ended up 3.6 percent for the week.
June closed 0.675 cents/lb. higher at 94.875 cents and July ended at 93.3 cents, up 0.275 cent.
— Theopolis Waters reports for Reuters from Chicago.