U.S. livestock: CME live cattle end mixed on month-end positioning

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed mixed on Friday in thin post-Thanksgiving Day volume on positioning during the last trading day for November, traders said.

December closed down 0.375 cent per pound at 168.875 cents, and February was at 169.225 cents, 0.45 cent lower (all figures US$). April and June ended 0.7 cent higher at 169 and 161.3 cents, respectively.

In a trading strategy known as bear spreads, traders sold nearby contracts and simultaneously bought deferred months despite this week’s bullish market fundamentals.

On Wednesday, market-ready or cash cattle on the U.S. Plains sold at $172 to $173 per hundredweight (cwt), steady with most of last week’s sales.

Friday morning’s choice wholesale beef price was up two cents/cwt from Wednesday at $257.15. Select rose $1.89 to $245.89, the U.S. Department of Agriculture said.

Beef demand is expected to increase as supermarkets feature it for consumers who have had their fill of leftover Thanksgiving turkey and ham, an analyst said.

While packers needed cattle for the first full week of production after the holiday, they resisted spending more for supplies given their poor margins.

Beef packer margins for Friday were a negative $99.80 per head, compared with a negative $72.40 a week ago, according to Colorado-based analytics firm Hedgersedge.com.

Futures’ discounts to this week’s cash prices, and solid wholesale beef values, might encourage buying on Monday, traders and analysts said.

Fund buying, weaker corn prices and firmer back-month live cattle futures lifted CME feeder cattle contracts.

January closed 0.575 cent/lb. higher at 231.075 cents, and March at 230.2 cents, up 0.85 cent.

Hog futures drop

CME lean hogs fell on sell stops and the pullback in wholesale pork price, traders said.

December closed at 90.325 cents, down 0.625 cent, and February was 1.325 cents lower at 88.225 cents.

USDA data showed the morning’s wholesale pork price had fallen $1.11/cwt from Wednesday to $91.68, led by a $4.05 drop in ham costs.

Investors are monitoring cash hog prices as packers top off inventories for an estimated 287,000-head Saturday kill and next week’s production.

Slaughter-ready or cash hogs in the Midwest on Friday morning traded steady, regional hog dealers said.

Hog numbers should begin to taper off seasonally as colder temperatures slow down animal weight gains, traders and regional hog dealers said.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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