U.S. livestock: Cash price optimism lifts CME live cattle

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures posted slight gains on Thursday in anticipation of packers paying the same or more for supplies than last week, traders said.

June live cattle closed 0.3 cent/lb. higher at 121.725 cents, and August ended up 0.2 cent, to 117.65 cents (all figures US$).

Shrinking cattle weights, better-than-expected Memorial Day holiday beef sales and slipping but still profitable packer margins point to possible firm cash prices by Friday, said U.S. Commodities analysts Don Roose.

Market-ready, or cash, cattle bids surfaced in Kansas at $123/cwt versus $130-$132 asking prices there and in Texas, said feedlot sources. Last week, cash cattle in the U.S. Plains traded at $122-$126.50.

The morning’s choice beef price, or cutout, at $222.44/cwt was up nine cents from Wednesday. Select cuts rose 39 cents to $201.56, the U.S. Department of Agriculture said.

Beef packer margins for Thursday, on average, were a positive $58.45 per head, down from a positive $93.25 on Wednesday but up from a positive $47.62 a week ago, as calculated by HedgersEdge.com.

CME February feeder cattle felt pressure from its premium to the exchange’s feeder cattle index for May 27 at 143.93 cents. Remaining contracts were supported by technical buying and live cattle market gains.

August finished down 0.025 cent/lb., to 146.4 cents. September closed up 0.225 cent to 145.075 cents, and October ended 0.425 cent higher at 143.725.

Higher hog market settlement

Firm cash and wholesale pork prices pushed up CME lean hogs, with some months making new contract highs, traders said.

Spot June closed 0.875 cent/lb. higher at 82.025 cents. July ended up 1.65 cents, to 84.45 cents, after peaking at a new contract high of 84.475 cents.

Thursday morning’s wholesale pork price was 48 cents/cwt higher than on Wednesday at $86.11, according to USDA.

Government data on Thursday showed the morning average cash hog price in Iowa/Minnesota at $73.99, up 24 cents from Wednesday.

Investors look for USDA’s weekly export data on Friday to show strong movement of pork to China after their prices hit historically high levels, said Roose.

Hog slaughters and animals weights continue to decline going into July, which is supportive for cash and wholesale pork prices, he said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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