Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed higher on Thursday, fueled by short-covering and technical buying that turned back initial selling, traders said.
October led the day’s rally as investors bought that contract and simultaneously sold August ahead of its expiration on Aug. 31.
Spot-August futures closed up 0.15 cent/lb. at 148.85 cents. October ended 1.25 cents higher at 147.85 cents, and above the 20-day moving average of 147.25 cents (all figures US$).
CME live cattle’s turnaround, along with much-improved packer margins, backed expectations of packers paying about the same this week for cash cattle as last week.
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Processors in Kansas and Texas bid $147/cwt for market-ready (cash) cattle, against $153 asking prices, feedlot sources said. Cash cattle a week earlier sold at mostly $150 to $152.
Traders worried that the morning’s mixed, rather than higher, beef cutout values suggest the recent uptrend in wholesale prices might end soon.
Thursday morning’s wholesale choice beef price rose $1.26/cwt from Wednesday, to $245.28. Select cuts slipped 26 cents, to $235.19, the U.S. Department of Agriculture said.
CME feeder cattle drew support from technical buying and live cattle market gains.
August closed up 0.150 cent/lb. to 214.025.
Hogs up with pork, discounts
Thursday morning’s wholesale pork price upswing, and futures’ discounts to CME’s hog index for Aug. 11 at 78.67 cents, drove up the exchange’s lean hog contracts, traders said.
October and December rolled through chart resistance levels, which ignited fund buying and buy stops, they said.
Spot-month August, which will expire on Friday, closed 0.775 cent higher at 78.625 cents.
Most-active October ended 1.675 cents higher at 65.05, and above the 10-day moving average of 64.458 cents. December finished 1.125 cents higher at 61.225 cents, and surpassed the 20-day moving average of 61.13 cents.
The morning’s wholesale pork price was at $91.24/cwt, $1.16 higher than on Wednesday, USDA said.
Armed with “impressive” margins, packers are close buying all the hogs they need into early next week, a trader said. Grocers are booking pork for Labor Day holiday barbecuing in early September, he said.
The average Thursday morning price for cash hogs in Iowa/Minnesota had dipped 30 cents from Wednesday to $75.69, USDA said.
Pork processor margins for Thursday were at $24 per head, compared with $27.25 on Wednesday and $19.15 a week ago, as calculated by HedgersEdge.com.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
