Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended higher on Wednesday, supported by lagging cattle weights and expectations for higher cash market prices this week.
Packers will be battling for a smaller number of market-ready cattle on showlists after recent frigid weather in the U.S. Plains and heavy snow in Iowa impeded cattle performance.
“Cattle have stopped gaining weight, the weights are down, and they can’t move them because of the weather in some areas,” said Oak Investment Group president Joe Ocrant.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
“Eventually this weather is going to break and the cattle are going to start gaining weight and you’re going to have a boatload of cattle coming in,” he said.
Investors are waiting on packer bids to develop following trades last week in the southern Plains at $125 to $126/cwt (all figures US$). Some bids of $126/cwt were reported on Tuesday against offers of $130, Ocrant said.
CME February live cattle closed up 0.825 cent/lb. at 127.650 cents. April ended 0.45 cent higher at 125.225 cents and June gained 0.4 cent at 117.05 cents.
Feeder cattle futures also advanced, with March futures up 0.9 cent/lb. at 148.175 cents and April 0.925 cent higher at 150.425 cents.
Lean hog futures climbed on technical and fund buying and spillover support from rising cattle.
February futures, which expire on Friday, ended up 0.15 cent at 73.5 cents. The actively-traded April contract settled up 1.225 cents/lb. at 70.65 cents after testing chart resistance at its 200-day moving average.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.
