U.S. livestock: CME live cattle extend gains

Chicago | Reuters — Chicago Mercantile Exchange live cattle contracts on Monday landed in positive territory for a second straight session, driven by more short-covering and futures’ discounts to last week’s cash prices, traders said.

June live cattle closed 0.875 cent/lb. higher at 115.8 cents, and August ended up 1.3 cents at 113.725 cents (all figures US$).

Last week packers paid mostly $124/cwt for market-ready, or cash, cattle. That was down $3 from the week before, but undervalued compared to current futures prices.

Bullish investors look for wholesale beef prices to bottom out soon, which may motivate packers to raise bids for cash cattle later this week, a trader said.

Monday morning’s wholesale choice beef price, or cutout, slipped 25 cents/cwt from Friday to $211.20. Select cuts were $1.63 lower at $200.69, the U.S. Department of Agriculture said.

In a trading strategy known as bear spreading, traders sold the June contract and simultaneously bought August. The spread pushed August above the 10-day moving average of 113.63 cents, which triggered buy stops and fund buying.

Live cattle market advances boosted CME feeder cattle futures. May finished one cent/lb. higher at 141.425 cents.

Repeat hog market gains

CME lean hogs ended higher for a fourth straight session, following continued cash hog price hikes and the morning’s strong wholesale pork values, traders said.

Thinly traded May ended 0.525 cent/lb. higher at 78.425 cents, and most-active June closed one cent higher at 82.7 cents.

Cash hogs in the Midwest on Monday morning mostly traded 50 cents/cwt higher due to tight supplies, regional hog dealers said.

Monday morning’s wholesale pork price was $1.90/cwt higher than on Friday at $84.44, USDA said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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