U.S. livestock: Cash prices fuel higher CME live cattle futures

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Friday closed up 2.3 per cent, their biggest one-day gain in over a month, after packers paid more for livestock than expected, said traders.

Buy stops, short-covering and fund buying accelerated futures advances, they said.

December live cattle finished 2.625 cents/lb. higher at 118.9 cents, and above the 20-day moving average of 117.54 cents (all figures US$). February ended 1.875 cents higher at 121.025 cents, and above the 100-day moving average of 119.355 cents.

On Friday, packers in the U.S. Plains paid $118-$120/cwt for slaughter-ready, or cash, cattle that a week earlier brought $115-$118.

Some processors needed cattle heading into their final week of slaughters for the year prior to the Christmas and New Year’s holidays, said analysts and traders.

There were fewer cattle for sale than last week, a trader said. And some ranchers were current, or sent animals to market earlier than they had planned, based on lighter cattle weights, he said.

Investors look ahead to next week’s cash and futures trade, with packers buying cattle for the Christmas holiday-shortened workweek while beef demand continues to struggle seasonally.

Participants will adjust positions before exiting the market for holiday vacations, which could stir market volatility.

The U.S. Department of Agriculture’s monthly Cattle on Feed report is scheduled for release on Dec. 22 at 11 a.m. CT.

Buy stops, short-covering and live cattle futures advances also lifted CME feeder cattle to its biggest daily increase in over a month, up 1.2 per cent.

January feeder cattle closed 1.5 cents/lb. higher at 147.75 cents.

Hog futures finish higher

CME lean hogs settled higher, led by slight cash hog and wholesale pork price increases, said traders.

Modest fund buying and support from CME’s cattle markets helped lift the exchange’s lean hog contracts, they said.

February closed 0.9 cent higher at 68.525 cents. April ended up 0.55 cent at 72.8 cents.

Both trading months landed above their respective 10-day moving average of 68.495 and 72.785 cents.

Some processors bumped up cash hogs bids to maintain a consistent flow of supplies for next week’s production, a trader said.

Grocers are buying pork sparingly until they determine how much of it sold over the Christmas holiday, he said.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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