U.S. livestock: Surging beef prices float CME live cattle higher

Chicago | Reuters — Chicago Mercantile Exchange live cattle contracts closed higher on Tuesday following a steep rise in wholesale beef values that could help underpin cash prices later this week, traders said.

February closed 0.525 cent/lb. higher at 136.95 cents, and April ended at 135.5 cents, up 0.875 cent (all figures US$).

The morning’s wholesale choice beef price climbed $2.19/cwt from Monday, to $215.47. Select cuts jumped $2.69, to $212.49, the U.S. Department of Agriculture said.

“We’re getting down to the nitty gritty,” said JRS Consulting owner Jack Salzsieder. Retailers are considering buying product to feature after Easter and for spring grilling, he said.

Current futures prices, improved wholesale beef demand and fewer cattle for sale point to steady to better prices for market-ready, or cash cattle, than last week, said traders and analysts.

A week ago, packers paid $133-$134/cwt for cash cattle.

Tuesday’s average beef packer margin was a negative $41.10 per head, down from a negative $31.15 on Monday and negative $37.70 a week ago, as calculated by HedgersEdge.com.

USDA will issue the monthly cold storage report on Tuesday at 2 p.m. CT that will include January beef and pork inventories.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 516.1 million lbs., and pork at 608.1 million lbs.

Strong cash feeder cattle prices and weaker corn futures boosted CME feeder cattle contracts. March closed 1.85 cents/lb. higher at 157.025.

Hogs close higher

CME lean hogs gained in anticipation of tighter spring supplies and firm wholesale pork values with some packers scheduled to curb production, traders said.

April closed up 0.7 cent/lb. to 69.95 cents, and thinly traded May finished up 0.275 cent/lb. to 76.3 cents.

The morning’s wholesale pork price was 85 cents/cwt higher than on Monday at $76.48, USDA said.

Fund buying and live cattle market advances contributed to lean hog futures gains in the face of soft cash prices, traders and analysts said.

Cash hogs in the U.S. Midwest on Tuesday morning traded steady to weak, with at least one packing plant expected to be closed on Thursday for scheduled maintenance, said dealers.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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