Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures turned up sharply on Thursday in anticipation of steady-to-better prices for market-ready or cash cattle this week, traders said.
Futures drew more support from their discounts to last week’s cash cattle returns.
August live cattle, which will expire on Friday, ended up 1.45 cent per pound at 154.65, and October at 150.1, 2.275 cents higher (all figures US$).
The CME live cattle October contract, which will assume lead-month duties following August’s expiration, led advances after punching through the 20-day moving average of 149.72 cents.
So far, cash cattle bids surfaced in the U.S. Plains at $151 to $152 per hundredweight (cwt) against $156 asking prices from sellers, feedlot sources said.
Last week, cash cattle in Kansas and Nebraska moved at mostly $153 to $155/cwt.
The rise in futures on Thursday and some packers in need of supplies may override sluggish wholesale beef values and processors buying for a holiday-shortened workweek, traders said.
On Thursday morning, the choice wholesale beef price, or cutout, slipped 34 cents/cwt from Wednesday to $247.07. Select fell $2.02, to $235.58.
Investors will monitor beef cutout values for signs of a seasonal downtrend as shoppers transition from outdoor cookouts to preparing meals indoors.
CME feeder cattle gained for a sixth straight session in light volume, fueled by fund buying and live cattle market gains.
August, which expired at noon CT, settled up 0.375 cent/lb. at 218.525 cents. September , the new spot month, closed 2.675 cents higher at 217.15 cents.
Hogs finish weak
CME hogs posted a loss for the first time in four days, pressured by profit-taking following the downward slide in cash and wholesale pork prices, traders said.
October closed 0.45 cent/lb. lower at 95.475 cents, and December down 0.125 cent to 90.375 cents.
USDA’s Thursday morning direct hog market prices were unavailable. Midwest hog dealers said prices in the region were 50 cents to $1/cwt lower.
The morning’s wholesale pork price dipped 21 cents/cwt from Wednesday to $99.97, USDA said.
More hogs came to market as producers tried to avoid falling prices, traders and analysts said. Packers will need less livestock with plants scheduled to be closed on Monday for the Labour Day holiday, they said.
Meanwhile, grocers are cautious about buying large amounts of pork until they can evaluate how much product moved over the three-day holiday weekend.
Speculation that packers may need supplies after Labour Day, and futures’ discounts to the exchange’s hog index at 100.34 cents, minimized Thursday’s market losses, a trader said.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.