Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed higher Monday, helped by the morning’s strong wholesale beef values and last week’s record-high cash prices, traders said.
Monday morning’s choice wholesale beef price jumped $2.03 per hundredweight (cwt) from Friday to $254.19 (all figures US$). Select climbed $1.53 to $239.82, the U.S. Department of Agriculture said.
Last week, slaughter-ready or cash cattle in the U.S. Plains hit a record $172/cwt after wintry weather made it difficult to send livestock to market.
Packers likely charged retailers more for beef to justify last week’s higher cash cattle prices, a trader said.
Some processors were short bought after their poor margins forced them to purchase smaller numbers of cattle in recent weeks.
Processors are buying supplies for the U.S. Thanksgiving holiday-shortened work week, which will limit their need for animals, traders and analysts said.
CME live cattle finished off session highs after investors took profits while awaiting this week’s cash cattle sales.
December closed 0.8 cent per pound higher at 171 cents, and February at 172.1 cents/lb., up 0.825 cents.
CME feeder cattle drew support from live cattle market buying and soft corn prices.
November closed up 0.025 cent/lb. at 240.025 cents, and January 1.35 cents higher at 237.475 cents.
Mixed hogs settlement
CME lean hogs ended mixed in a trading strategy known as bull spreads that consisted of traders who bought the December contract and simultaneously sold February futures.
December closed up 0.325 cent/lb. at 93 cents, and February down 0.125 cent at 92.625 cents.
Traders implemented spreads or periodically pocketed profits as they waited for clear fundamental market direction.
USDA data quoted Monday morning’s average hog price in the eastern Midwest down 26 cents/cwt from Friday at $83.80.
Separate government data showed the morning’s wholesale pork price was up two cents/cwt from Friday to $95.95.
A few processors need hogs for early-week production, traders said. But, cash prices may trend lower ahead of packing plant shutdowns for the Thanksgiving holiday, they said.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.