Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Friday closed up their three-cents-per-pound daily price limit, ignited by active short-covering and bargain hunting after contracts recently tumbled to two-year lows, traders said.
Spot-October and December finished at 133.7 and 137 cents/lb., respectively (all figures US$).
Live cattle’s trading limit will be expanded to 4.5 cents on Monday following Friday’s limit-up settlement.
“The market was dramatically oversold, but it’s been that way all week,” said Oak Investment Group president Joe Ocrant.
Futures rallied despite unrelenting bearish fundamentals.
Friday morning’s wholesale choice beef price fell $1.40, to $213.45/cwt, from Thursday. Select cuts slid 94 cents, to $210.68, the U.S. Department of Agriculture said.
This week, packers paid $128 to $130/cwt for market-ready, or cash, cattle, down as much as $6 from last week, feedlot sources said.
Heavyweight cattle dragged on cash values and prices for wholesale beef, which also encountered competition from cheaper pork, traders and analysts said.
CME feeder cattle finished up their 4.5-cent/lb. price limit, following live cattle future’s limit-up move. Feeder cattle trading limits will be expanded to 6.75 cents on Monday.
Feeder cattle futures also benefited from their discounts to the exchange’s feeder cattle index for Sept. 23 at 195.75 cents.
October ended at 184.6 cents/lb.
Hogs mostly weak ahead of report
CME lean hogs settled mostly weak after traders tweaked positions before the government’s quarterly hog report on Friday at 2 p.m. CT.
Analysts said herd expansion likely slowed during the June-August quarter compared to last year after lower cash prices hurt profits for farmers.
Spot-October hogs closed up 0.225 cent/lb. at 71.875 cents, December down 0.05 cent to 65.775 cents, and February ended 0.725 cent lower at 68.95.
The morning’s lower cash prices limited futures gains, while strong wholesale pork values offered downside support, traders said.
USDA quoted Friday morning’s average cash price in the western Midwest at $69.16/cwt, down 83 cents from Thursday.
The wholesale pork price on Friday morning was at $84.29/cwt, $1.87 higher than on Thursday, with all cuts gaining in value except picnic shoulders, USDA said.
Some packers trimmed cash bids after wrapping up near-term supply needs, traders said.
Grocers are buying pork hand-to-mouth after buying most of what they need for National Pork Month in October, they said.
— Theopolis Waters reports on livestock futures for Reuters from Chicago.