Chicago | Reuters — Live cattle futures rose on Wednesday for a fourth straight session, climbing ahead of Thursday’s U.S. Thanksgiving holiday as strong packer margins fed expectations of improving cash cattle prices over the next few weeks, traders said.
Chicago Mercantile Exchange February live cattle futures settled up 0.225 cent at 114.175 cents/lb. (all figures US$).
CME January feeder cattle ended up 1.575 cents at 140.175 cents/lb.
Meat packers were earning margins estimated at $448 per head of cattle on Wednesday, up from $371 a week ago, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
The margins reflect a rally in wholesale (boxed) beef prices that began in late October.
“The boxed beef has been on fire. The feeling is that (consumers) are stockpiling again … and also there is an upbeat attitude on these (COVID-19) vaccines, giving people hope for the future,” said Don Roose, president of Iowa-based U.S. Commodities.
Choice boxed-beef cuts were up 76 cents on Wednesday afternoon at $245.06/cwt, the highest since June. Select cuts were up $1.19, at $220.90, the U.S. Department of Agriculture said.
With beef demand lifting margins, packers paid $110-$111/cwt for market-ready cattle in the southern Plains cash market on Wednesday, USDA said, steady to $1 higher with last week’s trades.
CME lean hog futures closed higher. The benchmark February contract settled up 0.925 cent at 67.675 cents/lb. after encountering chart resistance near its 50-day moving average of 67.725 cents.
Traders await USDA’s weekly export sales report, which is delayed until Friday due to Thursday’s holiday, to gauge demand for U.S. pork from China, the world’s biggest pork consumer.
Trade in CME livestock futures will be closed on Thursday, with markets resuming for a shortened session on Friday.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.