Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended higher for a second straight session Monday, supported by the morning’s wholesale beef price increase, traders said.
Spot October closed 2.325 cents/lb. higher at 138.275, and December up 2.225 cents to 141.65 (all figures US$).
Monday morning’s wholesale choice beef price, or cutout, climbed $1.44/cwt from Friday, to $213.13/cwt. Select cuts rose 85 cents, to $207.21, the U.S. Department of Agriculture said.
However, sales volume at 74 loads was the smallest for the morning report since 63 loads on Sept. 4, and well shy of the most recent peak of 190 loads on Oct. 7.
Beef demand should remain steady through the first few weeks in November until hams and turkey dominate meat promotions through the winter holidays, said Doane Advisory Services economist Dan Vaught.
Investors eagerly await prices for market-ready, or cash, cattle later this week after packers paid almost $20/cwt more for supplies within the past two weeks.
A week ago, cash cattle brought $134-$137/cwt, up from $126-$127 the week before.
After producers cleaned up most of the surplus heavyweight cattle in late September through early October that “tanked” the cash market, circumstances have changed thanks to improved beef demand and tighter supplies than a month ago, said Vaught.
Cash prices recently climbed faster than wholesale beef values which trimmed packer margins.
The average beef packer margin for Monday was $75.50 per head, down from $83.35 on Friday and $117.15 a week earlier, as calculated by HedgersEdge.com.
CME October feeder cattle ended 1.2 cents/lb. higher at 195 cents, helped by weak corn prices and strong live cattle futures.
December hogs up, others down
CME lean hog investors sold deferred months and simultaneously bought the December contract because of its sizable discount to the exchange’s hog index for Oct. 15 at 74.96 cents, traders said.
They said other hog contracts were pressured by abundant seasonal supplies that weighed on cash and wholesale pork prices.
December finished up 0.4 cent/lb. at 65.975 cents, February was down 0.475 cent to 67.975 cents and April 0.5 lower at 71.45.
The government reported the morning’s average cash hog price in the western Midwest at $70.78/cwt, $2.28 lower than on Friday.
The morning’s wholesale pork price was at $88.77/cwt, down 54 cents from Friday, USDA said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.