U.S. livestock: CME live cattle rise before USDA report

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed firm on Friday, partly on positioning ahead of the U.S. Department of Agriculture’s monthly Cattle on Feed report.

Analysts expect the data at 2 p.m. CT to show decreased cattle placements in February compared with a year ago.

April closed 0.35 cent per pound higher at 158.35 cents, and June up 0.25 cent, to 150.475 cents (all figures US$).

Investors await this week’s prices for market-ready (cash) cattle.

Cash bids in Kansas and Texas were at $159-$160 per hundredweight (cwt) against up to $164 asking prices from sellers, industry sources said. Last week, cash cattle in the U.S. Plains sold at $161-$162.50.

A few packers are short bought on supplies, but others cut kills to avoid raising bids for cattle while trying to improve their margins and drive up wholesale beef values, traders said.

Packers processed 83,000 head of cattle Friday, 13,000 fewer than a week ago, USDA said.

Retailers are resisting high-priced beef given plentiful competitively-priced pork, an analyst said.

Friday morning’s choice wholesale beef price dropped $2.23/cwt from Thursday, to $244.38. Select cuts slipped 23 cents, to $244.56, USDA said.

USDA will issue the monthly cold storage report on Monday that will include total February beef and pork inventories.

A few analysts, on average, estimated last month’s total beef stocks at 495.2 million lbs., and pork stocks at 637 million lbs.

CME feeder cattle drew support from buy stops, technical buying and late-day live cattle futures gains.

March closed 0.825 cent/lb. higher at 214.875 cents, and April up 0.175 cent at 216.2 cents.

April hogs up, others down

CME lean hogs closed mostly weak as traders sold deferred contracts and simultaneously bought April because of its discount to the exchange’s hog index for March at $63.56.

April closed 0.325 cent/lb. higher at 58.45 cents, May down 0.4 cent to 68.275 cents and June 0.675 cent lower at 73.85 cents.

Anticipation of retail pork buying for spring grilling, and talk that hog numbers might tighten after farmers rushed livestock to market to avoid lower prices, provided added support to April futures.

On Friday, cash hogs in the Midwest sold mostly steady with Thursday’s prices, regional hog dealers said. The morning’s wholesale pork price slumped $1.22/cwt, to $67.52, from Thursday, USDA said.

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

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