Chicago | Reuters — Chicago Mercantile Exchange live cattle closed higher on Wednesday after initial selling, helped by short-covering and futures’ discounts to last week’s cash prices, traders said.
June closed 0.675 cent per pound higher at 152.475 cents, and August ended up 0.8 cent at 151.425 cents (all figures US$).
Last week, most market-ready (cash) cattle in the U.S. Plains sold at $159-$161 per hundredweight (cwt), feedlot sources said.
Some packers need cattle for the first full week of kills after Monday’s U.S. Memorial Day holiday, but others are thought to have enough inventory thanks to a seasonal supply increase, traders said.
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Processors are cautious about spending more for cattle ahead of beef demand that tends to taper off in June, they said.
Wednesday morning’s choice wholesale beef price dipped 31 cents/cwt from Tuesday to $260.76. Select cuts rose 90 cents to $250.10, the U.S. Department of Agriculture said.
June futures gained more ground on technical buying after surpassing the 10-day moving average of 152.17 cents.
Weaker corn futures and CME live cattle market earlier sent the exchange’s feeder cattle contracts to 4 1/2-month highs.
August ended up 1.825 cents at 221.425 cents, and September was 1.65 cents higher at 220.175 cents.
Hogs up, but slip from highs
CME lean hogs held some of their earlier gains fueled by technical buying and Tuesday’s strong cash and wholesale pork values, traders said.
But, they said, Wednesday’s softer market fundamentals pulled contracts from session tops.
June closed up 0.6 cent/lb. at 83.775 cents, and July 0.525 cent higher at 83.325 cents.
Wednesday morning’s average cash hog price in Iowa/Minnesota slumped $1.79/cwt in light volume from Tuesday to $77.43, USDA said.
Separate government data quoted the morning’s wholesale pork price at $85.98/cwt, down 69 cents from Tuesday.
Several processors have enough hogs for the week, but a few others are having difficulty finding light-weight animals, Midwest hog dealers said.
Investors are tracking wholesale pork sales and packer margins to gauge packer intentions for Saturday’s slaughter to make up for Memorial Day holiday plant shutdowns.
“If packers can find the animals they need, and their margins hold together, they could put up a big Saturday kill,” an Indiana hog dealer said.
Wednesday’s pork packer margins were a positive $11.05 per head, compared with a positive $8.75 on Tuesday and a positive $3 a week ago, according to Colorado-based analytics firm HedgersEdge.com.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
