Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Tuesday marked three days of gains, supported by their discounts to last week’s prices for market-ready, or cash, cattle, traders said.
June live cattle closed 0.575 cent/lb. higher at 116.375 cents, and August ended up 0.625 cent at 114.35 cents (all figures US$).
Cash cattle in the U.S. Plains last week brought $124/cwt. Investors are expecting similar prices later this week given tighter but still profitable packer margins and considerably fewer animals for sale than last week.
Traders also look for beef cutout values to stabilize after falling four days in a row to levels that might generate retail buying interest.
Tuesday morning’s wholesale choice beef price, or cutout, dropped $1.54/cwt from Monday to $208.23. Select cuts were $1.04 higher at $201, the U.S. Department of Agriculture said.
Tuesday’s average beef packer margin was estimated at a positive $30.35 per head, down from a positive $31.75 on Monday and a positive $60.75 a week ago, as calculated by HedgersEdge.com.
Technical buying and further live cattle market advances pulled up CME feeder cattle futures. May finished 1.975 cents/lb. higher at 143.4 cents.
More hog market gains
Seasonally tight supplies fuelled a nearly two-week cash price rally, helping to extend CME lean hog’s winning streak on Tuesday to five consecutive sessions, traders said.
They said profit-taking and futures’ premiums to the exchange’s hog index for April 29 at 71.11 cents capped market advances.
Thinly traded May ended up 0.05 cent/lb. to 78.475 cents, and most-active June closed 0.225 cent higher at 82.925 cents.
Government data on Tuesday showed the morning average cash hog price in Iowa/Minnesota at $69.92, up 17 cents from Monday.
“I think the pigs packers are rounding up for Saturday supported the cash market today,” a Midwest hog dealer said.
Dealers forecasted a roughly 75,000-head Saturday slaughter, which will include a packing plant making up down time after it closed two days last week for equipment upgrades.
USDA estimated last Saturday’s hog slaughter at 60,000 head.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.