Chicago | Reuters — Chicago Mercantile Exchange live cattle gained for a third day in a row on Thursday, lifted by record-high prices for choice beef, stoked by grilling demand, traders and analysts said.
June closed up 1.825 cents per pound at 153.8 cents, and August 1.425 cent higher at 152.075 cents (all figures US$).
Thursday morning’s choice wholesale beef price climbed $1.35 per hundredweight (cwt) from Wednesday to $264.52, surpassing its previous record of $263.81, set on Jan. 14. Select cuts surged $2.38, to $251.49, the U.S. Department of Agriculture said.
Grocers, processors and restaurants are gearing up to feature beef for the May 25 U.S. Memorial Day holiday and for Father’s Day, analysts said.
CME live cattle contracts’ discounts to last week’s cash prices were behind some of the day’s gains, “but record-high beef prices didn’t hurt,” said David Hales, author of the Hales Cattle Letter.
Futures gained more traction despite talk that packers might spend less than they did last week for cash cattle as supplies grow seasonally.
But market bulls cling to hope of prices on par with a week ago after the pop in wholesale beef values enhanced packer margins.
Cash bids in the U.S. Plains were $157-$160/cwt against up to $164 asking prices, industry sources said. Last week, cash cattle moved at $161-$164.
CME feeder cattle posted their sixth day of advances, led by live cattle market buying.
May closed 0.5 cent/lb. higher at 219.25 cents, and August up 1.325 cents at 218.95 cents.
May expires firm, others weak
The CME lean hog May contract, which expired at noon CT, settled up 0.325 cent/lb. at 81.7 cents and slightly above the exchange’s April 12 index at 80.18 cents.
Remaining hog futures’ premiums to the exchange’s hog index kept buyers on the defensive, traders said.
The slump in Thursday’s cash hog prices exerted more pressure on futures despite strong pork demand, they said.
June closed 0.825 cent lower at 83.95 cents, and July down 0.6 cent, to 84.65 cents.
USDA reported Thursday morning’s average cash hog price in Iowa/Minnesota dropped 65 cents/cwt from Wednesday, to $80.11.
Separate government data quoted the morning’s wholesale pork price at $83.91/cwt, $1.41 higher than Wednesday, led by $5.66 higher costs for butts used for pulled pork.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.