U.S. livestock: CME live cattle close higher, but off highs

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Friday reversed some of Thursday’s steep losses, helped by short-covering after investors squared positions on the last trading session for the month, traders said.

April live cattle, which expired at noon CT, settled 0.25 cent/lb. higher at 123.1 cents (all figures US$). June, the new spot month, ended up 0.125 cent to 114.925 cents.

The general theme this morning from the start was the market being oversold and end-of-month positioning, said Vetterkind Cattle Brokerage president Troy Vetterkind. “I think you have to get into early next week to see if today’s rally lasts,” he said.

Futures’ discounts to this week prices for market-ready, or cash, cattle encouraged some buyers. But others were put off by soft wholesale beef demand and cash price uncertainty for next week.

This week, cash cattle in the southern U.S. Plains fetched $124/cwt, down $3 from a week ago, said feedlot sources.

Friday morning’s wholesale choice beef price, or cutout, dropped 45 cents/cwt from Thursday to $212.05. Select cuts were up eight cents to $203.17, the U.S. Department of Agriculture said.

Analysts and traders were skeptical that wholesale beef prices are close to bottoming, given ample meat supplies after packers increased kills to capitalize on their shrinking but still positive margins.

Friday’s average beef packer margin was estimated at a positive $31.00 per head, down from a positive $43.50 on Thursday but well up from a negative $2.43 a week ago, as calculated by HedgersEdge.com.

Follow-through selling pressured CME May feeder cattle futures. Remaining trading months drew support from short-covering and live cattle futures buying.

May feeder cattle finished down 0.15 cent/lb. to 140.425 cents. August and September ended 0.575 cent/lb. higher at 140.375 and 140.5 cents, respectively.

Hog futures extend gains

Rising cash prices, as supplies tightened seasonally, landed CME hog futures in positive territory for a third day in a row, traders said.

Thinly traded May ended 0.575 cent/lb. higher at 77.9 cents, and most-active June closed 0.925 cent higher at 81.7 cents.

Government data on Friday showed the morning average cash hog price in Iowa/Minnesota up 96 cents/cwt from Thursday to $68.89.

“It would not surprise me to see the cash market creep up into next week. We’re still fairly short on pigs here,” a Midwest hog dealer said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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