Chicago / Reuters – Most Chicago Mercantile Exchange live cattle contracts settled weaker in choppy action on Wednesday after investors squared positions on Christmas Eve, traders said.
CME livestock markets will resume trading on Friday after closing early on Wednesday for Thursday’s Christmas holiday.
December finished 0.650 cent per lb higher at 162.500 cents, February down 0.025 cent to 160.575 cents and April 0.225 cent weaker at 159.400 cents.
In a trading strategy known as bull spreads, traders bought December futures and sold back months stirred by this week’s supportive fundamentals.
On Wednesday, market-ready or cash cattle in Kansas fetched $162 per hundredweight (cwt), up as much as $5 from last week, feedlot sources said.
They reported sales of $163 per cwt in Nebraska that were $3 higher than a week ago, they said.
The morning’s choice wholesale beef price gained $1.17 per cwt from Tuesday to $243.77. Select rose $1.42 to 232.68, according to the U.S. Department of Agriculture.
Packers hiked bids for cattle after being short-bought supplies for the New Year’s holiday workweek, traders and analysts said.
Cattle in some feedlots in the north-central Plains struggled to gain weight as they burned energy while moving around pens that became muddy after recent rain and wet snow, analysts and feedlots sources said.
Retailers bought beef to avoid potential shortages after plants shutdown over the Christmas and New Year’s holidays.
CME feeder cattle finished sharply lower, pressured by sell stops and periodic live cattle market weakness.
January closed down 2.375 cents per lb to 214.750 cents, and March 2.550 cents lower at 212.725 cents.
Modest hogs losses
CME hogs posted moderate losses in response to falling prices for slaughter-ready or cash hogs, traders said.
February closed 0.350 cent per lb lower at 81.300 cents, and April was down 0.125 cent to 83.675 cents.
Wednesday morning’s average price of hogs in the Iowa/Minnesota market was at $73.89 per cwt in thin volume, down $1.56 from Tuesday, according to USDA data.
Packers have inventory needs met while throttling back production over the Christmas and New Year’s holidays.
On Wednesday, packers processed 187,000 hogs, 243,000 less than a week ago, USDA said.
Hog dealers look for packers to process more than 270,000 hogs on Saturday to make up for lost production during the Christmas holiday.
Futures’ selling following Tuesday’s mildly bearish quarterly hog report lingered into Wednesday.