Chicago | Reuters — Chicago Mercantile Exchange live cattle posted modest gains on Friday on short-covering before Monday’s Martin Luther King, Jr. holiday that snapped an eight-day string of losses, traders said.
The U.S. Martin Luther King Jr. holiday could result in roughly 5,000 fewer cattle and 30,000 less hogs processed that day, an economist said.
Live cattle February closed up 0.25 cent per pound, to 154.45 cents, and April gained 0.15 cent, to 152.95 cents (all figures US$).
Futures drew more support from their discounts to cash prices, even though packers spent less for cattle as wholesale beef demand waned.
Slaughter or cash cattle in the U.S. Plains moved at $162 to $164.50 per hundredweight (cwt), down from $168 to $172 last week, feedlot sources said.
Friday morning’s choice wholesale beef dropped $1.75/cwt from Thursday to $261.13. Select fell $1.87, to $252.20, the U.S. Department of Agriculture said.
Processors were less inclined to spend more for cattle based on current futures prices while not being able to pass that cost on to retailers, a trader said.
CME feeder cattle finished mixed after sharply higher corn prices weighed on the January and March contracts.
Short-covering and modest live cattle market advances lifted deferred feeder cattle months.
January closed 1.55 cents/lb. lower at 214.1 cents, and March at 204.85 cents, down 0.75 cents. April finished up 0.1 cent, to 206.45 cents, and May 0.175 cent higher at 207.325 cents.
Hogs end lower
CME lean hogs drifted to a two-year low on sell stops and eroding cash hog prices, traders said.
February closed 1.125 cents/lb. lower at 74.5 cents, and April ended 0.675 cent lower, at 77.675 cents.
USDA data showed Friday morning’s average price of cash hogs in the Iowa/Minnesota market had fallen $1.07/cwt from Thursday in light volume to $70.27.
Investors are anticipating a seasonal cash price rally after processors clean up ample supplies in the near term, traders said
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.