U.S. livestock: CME live cattle futures climb before USDA report

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Friday closed higher, fuelled by their discounts’ to initial cash prices prior to the U.S. Department of Agriculture’s cattle-on-feed report at 2 p.m. CT, traders said.

Analysts expect Friday’s report to show the number of cattle placed in feedyards in March increased 0.8 per cent from a year ago, led by record-high prices for market-ready cattle.

Market-ready or cash cattle in Texas moved at $145 per hundredweight (cwt), down $1 from last week, feedlot sources said (all figures US$). Cash bids of $145 developed in Kansas with no sales reported, they said.

Packers have adequate cattle numbers after curbing production to offset tight supplies. And, processors are trying to grow their margins with help from strong beef demand prior to Friday.

Friday morning’s wholesale choice beef price was down 73 cents/cwt from Thursday at $233.07. Select cuts were unchanged at $222.07, based on USDA data.

Traders simultaneously bought June futures and sold the April contract before it expires on April 30.

Upward June momentum lifted that contract beyond the 40-day moving average of 136.248 cents, which triggered fund buying and buy stops.

April live cattle closed up 0.75 cent/lb. to 145 cents, and June ended at 136.775 cents, up 0.925 cent.

CME feeder cattle notched a new high for a second day in a row, led by higher live cattle futures.

May closed 0.4 cent/lb. higher at 180 cents. August ended up 0.575 cent to 184.625 cents, and peaked at a new contract high of 185.425 cents.

Hogs down with cash prices

CME hogs finished lower, pressured by the drop in cash and wholesale pork prices, traders said.

The morning’s average hog price in the western Midwest tumbled $5.28/cwt from Thursday to $110.20, according to USDA data.

Separate government data showed Friday morning’s wholesale pork price slipped 48 cents/cwt from Thursday to $116.22, led by lower ham and pork belly costs.

“Ham demand usually dries up after Easter,” a trader said.

Packers have all the hogs they need after some plants were offline last Friday and Monday during the Easter holiday. Those plants are expected to ramp up kills today and Saturday to make for the holiday downtime.

USDA data showed packers on Friday processed 416,000 hogs, 36,000 more than a week ago, and up 5,000 from last year. The government estimated Saturday’s slaughter at 61,000 head.

Futures’ premium to the exchange’s hog index, at 117.30, stirred more selling.

June and July losses accelerated after both contracts drifted below Thursday’s lows of 125.25 cents and 123.375 cents, which tripped sell stops.

May hogs closed 1.975 cents/lb. lower, at 120.925.

June ended 1.025 cents lower at 124.525, and July 1.275 cents lower at 122.675.

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

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