U.S. livestock: CME live cattle score four-month high

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Wednesday hit their highest level in four months, partly driven by short-covering and cash price optimism for this week, said traders.

December live cattle closed up 1.175 cents/lb. to 113.275 cents (all figures US$). Most actively-traded February ended up 0.725 cent, to 116.225 cents.

Wednesday morning’s Fed Cattle Exchange (FCE) generally yielded $112-$113.50/cwt sales, compared to mostly $112 a week ago there and elsewhere in the U.S. Plains.

Before Wednesday’s FCE auction, packers in Texas and Kansas bid $109-$110/cwt for slaughter-ready, or cash, cattle that are priced up to $116, said feedlot sources.

Initial cash prices are encouraging, but it is hard to be wildly bullish before two holiday-shortened work weeks and a cattle report on Friday, said AgriVisor Services analyst Dale Durchholz.

“I think the reason people bought the market today is more technical than fundamental,” he added.

Analysts believe Friday’s U.S. Department of Agriculture monthly Cattle on Feed report at 11 a.m. CT will show more cattle flowed into feedlots in November than a year ago.

Weak corn prices and CME live cattle futures buying propped up the exchange’s feeder cattle contracts. January feeders was up 0.225 cent/lb., to 130.225 cents.

Higher hog close

Short-covering and position squaring ahead of the extended holiday vacations sent CME lean hog futures higher, said traders.

February hogs ended 0.900 cent per pound higher at 64.9 cents, and April 0.525 cent higher at 68 cents.

Futures made headway despite potentially lower cash prices as some packing plants prepare to shutdown from Friday through Monday in observance of the Christmas holiday.

“I’m surprised that a few of them (packers) wont’ go (slaughter) on Friday with product demand and profits the way they are,” a Midwest hog dealer said.

Wednesday morning’s cash prices in the Midwest were steady to down 50 cents/cwt, according to regional hog merchants.

USDA data showed Wednesday morning’s average wholesale pork price rose 43 cents/cwt from Tuesday to $79.41.

Average pork packer margins for Wednesday were estimated at a positive $47.80 per head, up from a positive $45.50 on Tuesday and a positive $39.00 a week ago, according to consultancy HedgersEdge.com.

Market participants await the government’s quarterly hog report, which also will be published on Friday at 11 a.m. CT.

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

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