Chicago | Reuters — Chicago Mercantile Exchange live cattle on Wednesday settled up its three-cent-per-pound daily price limit, driven by short-covering and fund buying, traders said.

They said CME live cattle garnered more support from higher wholesale beef values and future’s discount to early-week prices for market-ready, or cash, cattle.

June and August live cattle closed up three cents/lb. at 106.125 and 104.45 cents, respectively (all figures US$). Thursday’s limit will expand to 4.5 cents.

A few head traded at $110/cwt at Wednesday’s Fed Cattle Exchange, consistent with last week’s sale of a small number of cash cattle in the U.S. Plains.

Before the U.S. Memorial Day holiday some packers bought enough supplies for the rest of this week, a trader said. But others need cattle for next week, the first full post-holiday week of production, he added.

Grocers are restocking meat cases after Memorial Day and in preparation for Father’s Day on June 17, analysts and traders said.

It is risky to try selling futures at a sizable discount to cash cattle trading around $110/cwt while wholesale beef prices moving higher, said Midwest Market president Brian Hoops.

Speculators bought back-month CME cattle contracts with the view that feedlots rushing livestock to market earlier than they had planned may temper increased supplies ahead.

“There are still a lot of cattle coming at us… but it seems like we’re able to absorb some of those big numbers,” said Hoops.

CME feeder cattle reached a three-month top on higher live cattle futures and lower corn prices, which tends to reduce input costs for feedlots.

August closed 3.35 cents/lb. higher at 148.325 cents.

Hog futures post one-year high

CME hogs hit a one-year high on technical buying and upward-trending cash prices, said traders.

And active cattle futures buying supported lean hog contracts, they said.

June hogs closed 1.65 cents/lb. higher at 77.325 cents. July ended 1.275 cents higher at 80.125 cents, and above the 100-day moving average of 79.814 cents.

Packers competed for hogs whose numbers slowed down as hot weather causes them to eat less feed, thereby delaying delivery to packers.

“Weights coming down was positive for the hog market. Anytime you take supply off the market, especially a pound and a half off carcass weights, that’s a pretty big move,” said Hoops.

— Reporting for Reuters by Theopolis Waters in Chicago.