U.S. livestock: CME live cattle post gains after wild ride

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures finished higher on Friday after an up-and-down session, ultimately supported by short-covering and futures’ discounts to cash prices, traders said.

February closed 1.325 cents per pound higher at 154.85 cents, and April up 1.775 cents, to 152.275 cents (all figures US$).

This week, packers paid mostly $158-$160.50 per hundredweight (cwt) for slaughter-ready (cash) cattle in the U.S. Plains, compared with $158-$160 a week ago, feedlot sources said.

Cash prices were better than expected after packers miscalculated the number of cattle needed based on current futures prices and sluggish wholesale beef movement, an analyst said.

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West Coast port congestion has backed up meat exports, and Northeastern residents are bracing for more wintry weather that could further dent meat demand, an analyst said.

The morning’s choice wholesale beef price dropped $1.20/cwt from Thursday, to $243.39. Select fell $1.31, to $237.03, the U.S. Department of Agriculture said.

CME live cattle fluctuated throughout the session, stirred by sporadic profit-taking and position evening on the last trading day of the month.

“The market was so volatile, it made it hard to trade,” said Oak Investment Group president Joe Ocrant.

USDA will issue the semi-annual cattle inventory report on Friday at 2 p.m. CT.

The government’s inventory report tend to not influence futures because the results project cattle production well beyond the contracts listed by the exchange.

CME feeder cattle climbed on short-covering, weak corn prices and live cattle futures gains.

March closed 1.625 cent higher at 205.2 cents/lb., and April up 1.2 cents, to 205.4 cents.

Front-month hogs down, others up

CME lean hogs closed mixed on lower cash prices that stirred bear spreads consisting of investors who sold the nearby contracts and simultaneously bought back months.

February closed 1.075 cents/lb. lower at 67.475 cents and earlier hit a contract low of 67.375 cents in electronic trading. April ended down 0.95 cent, to 72.25 cents.

Thinly-traded May closed 1.025 cents higher at 80.45 cents, and June up 0.475 cent, to 84.1 cents.

The morning’s average cash hog price in Iowa/Minnesota was down $1.11/cwt from Thursday to $66.45 in light volume, USDA said.

Cash hog prices continued to struggle amid ample supplies, but some short-bought packers may spend more for hogs next week, a trader said.

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

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