Chicago | Reuters — Chicago Mercantile Exchange live cattle futures settled higher on Thursday, helped by technical buying and this week’s steady-to-firmer cash prices, said traders and analysts.
They said the prospect of increased supplies capped back-month futures advances.
February live cattle closed 0.875 cent/lb. higher at 117.65 cents, and above the 40-day moving average of 117.091 cents (all figures US$). April ended up 0.075 cent to 114.825 cents.
First-quarter cattle supplies will remain tight, but could grow later based on two most recent U.S. Department of Agriculture cattle reports, said U.S. Commodities president Don Roose.
This week, packers in the U.S. Plains bought slaughter-ready, or cash, cattle at $119 to $120.50/cwt, steady to up $1.50 from last week, said feedlot sources.
Wednesday’s Fed Cattle Exchange (FCE) sales ranged from $115 to $120.50/cwt, with an average price of $117.50 versus last week’s $119 average.
Prices for cattle on a live basis in the North were lower than in the South because of recent weather issues that resulted in animals with mud on them, said Roose.
Cattle carrying mud increases live weight and costs packers valuable time in cleaning the animal before processing.
Investors are closely monitoring heavy snow in the northeastern U.S. that could hurt meat demand in the nation’s most populous region.
Thursday morning’s choice wholesale beef price was down 34 cents/cwt to $189.09 from Wednesday. Select cuts dropped 40 cents, to $186.09, USDA said.
Fund buying and late-day live cattle futures gains rallied CME feeder cattle contracts.
March feeders closed 1.325 cents/lb. higher at 123.625 cents.
Mostly lower hog close
Investors sold deferred month CME lean hogs and simultaneously bought the February contract stirred by upward-trending cash prices, said traders.
They said profit-taking and increased hog production in the coming months further pressured back months.
February hogs ended 0.875 cent/lb. higher at 74.225 cents, and hit a new contract high of 74.35 cents.
Most actively traded April closed 0.95 cent lower at 70.775 cents, and May down 0.925 cent to 74.8 cents.
Thursday morning’s cash hog price in Iowa/Minnesota averaged $70.60/cwt, 48 cents higher than on Wednesday, USDA said.
“Huge demand by packers is overcoming the big supplies,” said Roose.
He added that overall pork demand remained good according to last month’s USDA cold storage data that showed record tight December inventories.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.