U.S. livestock: CME live cattle end higher, but off session tops

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle contracts on Wednesday reversed some of Tuesday’s heavy losses, helped by short-covering and bargain hunting, traders said.

April live cattle ended 1.4 cents/lb. higher at 132.075 cents, and June closed 1.1 cents higher at 121.85 (all figures US$).

Futures’ price discount to early-week prices for market-ready, or cash, cattle encouraged buyers. Uncertainty about subsequent cash returns capped market advances.

So far, southern Plains cash cattle sold for $132 to $133, steady to down $4 from last week, said feedlot sources. They said remaining sellers are asking as much as $136 for their animals.

Negative packer margins and more cattle for sale than last week may pressure prices for unsold cattle in parts of the Plains, said traders and analysts.

But, they said, packers that are short on inventory after not buying enough last week may be forced pay the same or more for cattle.

The average beef packer margin on Wednesday was estimated at a negative $37.80 per head, up from a negative $47 on Tuesday and compared to a negative $15.25 a week ago, as calculated by HedgersEdge.com.

April feeder cattle closed 0.55 cent/lb. higher at 153.175 cents, and May ended down 0.1 cent to 150.1 cents.

CME feeder cattle futures drew support from higher cash feeder cattle prices, but were pressured after live cattle contracts eased from session highs.

Hog futures rally

Investors actively bought deferred contracts and simultaneously sold April futures ahead of its expiration on April 14, traders said.

Still, they said, April drew support from upward-trending wholesale pork values and the prospect that fewer hogs might underpin cash prices.

April closed up 0.125 cent/lb. to 67.5 cents, May ended 0.85 cent higher at 75.75 cents and June finished 0.975 cent higher at 79.975.

The morning wholesale pork price on Wednesday was up 76 cents/cwt from Tuesday to $78.36, based on USDA data.

Cash hog prices around the U.S. Midwest on Wednesday morning traded steady, regional hog dealers said.

“We haven’t got much at all this week in the way of hogs because guys (farmers) are current,” or on time moving hogs to market, an Ohio dealer said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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