Chicago | Reuters — Chicago Mercantile Exchange live cattle futures gained on Wednesday, supported by rising wholesale beef values that could help strengthen cash prices as early as Thursday, traders said.
Spot October closed 1.325 cents/lb. higher at 133.75 cents, and December up 0.225 cent to 137.425 (all figures US$).
Wednesday afternoon’s wholesale choice beef price, or cutout, climbed $2.15/cwt from Tuesday to $210.61. Select cuts rose $2.28, to $205.62, the U.S. Department of Agriculture said.
Market-ready, or cash, cattle bids in Kansas and Texas were at $125/cwt versus as much as $140 asking prices, said feedlot sources. Last week, cash cattle sold at mostly $126 to $127.
Grocers are preparing to advertise more beef and poultry after putting October Pork Month behind them, said analysts and traders.
The wholesale beef price turnaround helped sustain profitable packer margins that could slip if higher money is paid for cattle this week.
The average beef packer margin for Wednesday was $78.45 per head, up from $63.35 on Tuesday, as calculated by consultancy HedgersEdge.com.
October ended 1.1 cent/lb. higher at 190.8 cents, driven by lower corn futures and the steep climb in cash feeder cattle prices.
Hog futures close lower
CME’s spot October hog contract, which expired at noon CT, settled up 0.25 cent/lb. at 75.1 cents. It spiked to a nine-month high before finishing nearly inline with the exchange’s hog index for Oct. 12 at 74.85 cents.
Remaining hog trading months were pressured by Wednesday morning’s soft cash and wholesale pork prices, traders said.
December, the new lead month, finished 0.75 cent/lb. lower at 66.825 cents, and February down 0.275 cent, to 69.45.
USDA quoted the afternoon wholesale pork price at $88.43/cwt, down 49 cents from Tuesday.
The government reported Wednesday afternoon’s average cash hog price in Iowa/Minnesota at $72.08/cwt, 44 cents lower than on Tuesday.
Packers have almost all they need for this week, including a projected 170,000-plus Saturday kill, a trader said, adding that supermarkets have eased pork purchases for the second half of Pork Month.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.