Chicago | Reuters — U.S. live cattle futures jumped as much as two per cent to the highest levels in nearly a month on Monday, lifted by gains in the cash cattle market and signs demand for beef was improving, traders said.
Feeder cattle futures also were sharply higher while lean hogs opened narrowly mixed before declining at the Chicago Mercantile Exchange (CME) as unseasonably cool weather in the U.S. delayed the onset of summer grilling season.
Live cattle for June delivery settled 2.575 cents higher at 123.3 cents/lb. (all figures US$). The contract rose for the seventh straight session, gaining more than seven per cent during the stretch for the largest such gains since December.
Futures extended gains following unexpectedly large gains in cash cattle prices in the southern U.S. Plains, where fattened cattle fetched $128/cwt, the highest prices in about two weeks. The cash sales occurred late on Friday, after the futures market was closed.
“The cash cattle (trades) last week were obviously very constructive, and you can’t do much about it until 8:30 a.m. (CT) on Monday,” said Tim Hackbarth, a cattle broker at the Zaner Group.
“Everyone was looking for at least $1 higher in futures, and we gapped higher,” Hackbarth said of futures that opened above the trading range established on Friday, forming a chart gap that was seen as a technically strong chart signal.
Rising prices for choice-grade wholesale beef also indicated better retailer demand, and feeder cattle traded $1-$10/cwt higher at a closely watched cash auction in Oklahoma City.
“All the strength was from last week’s cash. The OKC auction just added another positive to the futures,” one trader said.
May feeder cattle futures rose to the highest levels since mid-April, settling up 3.425 cents, to 150.8 cents/lb.
Lean hog futures for June delivery finished 1.125 cents lower at 80.15 cents/lb., touching the lowest levels in about 1-1/2 weeks. The contract fell below several moving averages, including its 50-day, sparking technical selling.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.