Chicago | Reuters — Chicago Mercantile Exchange live cattle futures firmed on Wednesday on expectations for higher U.S. cash prices this week, as lean hog futures set contract lows, analysts said.
Cash cattle were bid at about $168/cwt in the southern Plains, roughly $1 higher than the bulk of trading last week, said Dennis Smith, commodity broker for Archer Financial Services (all figures US$). Meatpackers will need to pay more to strike deals, he said.
“If they want the cattle, they’re going to have to bid higher than $168,” Smith said, adding that prices may rise to $170/cwt.
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Meat processors slaughtered an estimated 123,000 cattle on Wednesday, down from 127,000 cattle a week ago and 124,000 cattle last year, the U.S. Department of Agriculture (USDA) said.
The agency reported boxed beef prices rose, while HedgersEdge.com said processors’ margins climbed to $80.15 per head of cattle from $59.15 per head on Tuesday and $52.45 per head a week ago.
April live cattle finished 0.8 cent stronger at 168.4 cents/lb., and June live cattle ended up 0.075 cent at 160.3 cents/lb.
May feeder cattle stumbled 0.175 cent to close at 202.1 cents/lb. and touched a one-week low.
Traders are monitoring the effects of wintry weather on livestock in parts of the northern Midwest and Plains.
Blizzard conditions are increasing livestock stress in the Plains and disrupting travel in South Dakota and neighbouring states, USDA said in a report.
In the pork market, April lean hogs ended up 1.175 cents at 73.4 cents/lb., after sinking to a low of 71.975 cents/lb.
Deferred contracts finished weaker, with June hogs falling 1.2 cents to 88.375 cents/lb. and setting a low of 87.4 cents/lb.
USDA priced the pork carcass cutout at $76.56/cwt, down 29 cents from Tuesday, as belly values tumbled $9.26.
“There’s no demand for pork, which is really strange given the demand for beef is red hot,” Smith said.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
