U.S. livestock: Live cattle futures rally by 3-cents/lb price limit

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Chicago | Reuters – Chicago Mercantile Exchange live cattle futures settled up by their 3-cents per lb daily price limit on Wednesday, boosted by short-covering in response to improved wholesale beef demand and Tuesday’s better-than-expected preliminary cash prices, traders said.

Spot October and December ended at 139.675 and 143.600 cents per lb. Live cattle’s trading limit will be expanded to 4.5 cents on Thursday following Wednesday’s limit-up settlement.

Wednesday afternoon’s wholesale choice beef price, or cutout, was $2.19 per cwt higher than Tuesday at $220.14 per cwt. Select cuts rose $1.13 to $212.20, the U.S. Department of Agriculture said.

On Tuesday, market-ready, or cash, cattle in Kansas and Texas traded at $138 per cwt, which was in line with the bulk of last week’s sales, feedlot sources said.

Investors await prices for unsold cattle that sellers have priced at about $140 per cwt.

For a cash price over $140, with December futures already at about 143.500 cents, will be difficult as beef sales encounter ham and turkey business for Thanksgiving, said EBOTTrading.com senior analyst John Kleist.

Some investors attributed possibly tight supplies for this week’s unexpected cash price support and the recent bump in beef cutout values.

Others contend that negative packer profits forced packers to reduce slaughters, which lifted wholesale beef prices.

From Monday to Wednesday, packers processed 332,000 head of cattle, 5,000 fewer than a week ago, USDA said.

CME feeder cattle finished sharply higher, with some contracts up by their 4.500-cents per lb price limit, driven by strong live cattle futures advances.

Spot-October, which will expire on Thursday, closed 0.900 cent per lb higher at 193.500 cents. November and January ended limit up at 192.250 and 184.650 cents, respectively.

Feeder cattle limits will be expanded to 6.750 cents on Thursday.

Dec hogs up, others down

CME December lean hogs benefited from its hefty discount to the exchange’s hog index for Oct. 26 at 73.29 cents, traders said.

They added that remaining contracts were weakened by ample supplies and worries about pork demand after October Pork Month ends.

December closed up 0.150 cent per lb to 61.400 cents, February was down 0.200 cent to 64.500 and April 0.500 cent lower at 68.525.

Cash hog prices in the Iowa/Minnesota hog market on Wednesday afternoon slumped $2.01 per cwt from Tuesday to $66.68, USDA said.

Separate government data showed the afternoon’s wholesale pork price slipped 38 cents per cwt from Tuesday to $84.05.

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