Chicago Mercantile Exchange live cattle prices firmed during Monday’s quiet Veterans’ Day holiday in anticipation of at least steady cash prices this week, traders and analysts said.
Last Thursday, packers paid mostly $131 per hundredweight (cwt) for cattle, down $1 from the week before, said feedlot sources (all figures US$). A few sales of $132 were quoted in Nebraska late on Friday, they said.
Friday’s $132 Nebraska trade offered optimism for cash to trade at a minimum of steady this week, Doane Advisory Services economist Dan Vaught said.
Investors also expect tighter cattle numbers through next year, which is supportive for cash prices. Multi-year U.S. droughts hurt crops that pushed feed costs to record highs last year and contributed to the reduction in the herd to its lowest level in 61 years.
Snow forecasts this week in parts of the northern U.S. Plains, which could interrupt livestock production, bolstered nearby live cattle futures on Monday.
“The psychology of a snow market makes people leery about being short futures,” Oak Investment Group president Joe Ocrant said.
Funds that follow the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI) shifted, or “roll,” their CME live cattle and hogs December long positions into February and April. Monday was the third of five days for the procedure.
Speculative and fund buying developed after the December and February contracts broke through their respective 20-day moving averages of 132.62 cents and 134.02 cents.
December finished 0.35 cent per pound higher at 132.75 cents, and February closed at 134.375 cents, 0.425 cent higher.
CME feeder cattle eased from early-session highs as corn prices crept upward. Expensive feed could curb feedlot demand for young cattle.
November closed down 0.225 cent/lb. at 164.2 cents, and January ended at 164.175 cents, 0.25 cent lower.
Most hogs up as funds roll
Steady-to-weak cash hog prices and the “roll” by funds pressured CME December hog futures, but propped up February and April contracts, traders and analysts said.
December hogs ended down 0.075 cent, at 88.05 cents.
February hogs closed up 0.15 cent at 92.225 cents and April settled 0.35 cent higher at 94.05 cents.
Cash hog prices in terminal and direct markets were steady to down $1/cwt, pressured by ample supplies at higher weights, according to traders and hog brokers.
Some packing plants were closed on Monday in observance of the U.S. Veterans’ Day holiday, thereby keeping a lid on cash prices.
USDA livestock data and price information was unavailable due to the federal holiday.
Packers on Monday processed 391,000 head of hogs, 43,000 fewer than a week ago and about 9,200 less than a year earlier, as estimated by analytical market-research firm Urner Barry.
The prospect of tighter hog supplies next year if corn prices trend higher, encouraged deferred-month hog buyers.
And lingering concerns about the spread of the porcine epidemic diarrhea virus (PEDv), which is deadly to piglets, reducing hog production next year underpinned distant hog contracts.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.