U.S. livestock: Wall Street surge rallies CME live cattle

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose on Thursday, prodded by the stock market comeback as data showed better-than-expected second-quarter U.S. economic growth, traders said.

Renewed consumer confidence in the economy could support demand for U.S. goods, including meat, they said.

Short-covering and bargain hunting furthered CME live cattle market advances as investors awaited cash cattle sales on Friday.

Market-ready (cash) cattle bids in Kansas and Texas stood at $144 against $150/cwt asking prices, feedlot sources said (all figures US$). Last week, cash cattle in the U.S. Plains fetched $147 to $149.

Packers may show less interest in buying cattle after purchasing enough animals last week, traders and analysts said.

Furthermore, tepid beef demand in the face of cheaper pork and chicken might pressure cash prices, they said.

Thursday morning’s wholesale choice beef price rose 58 cents, to $244.82/cwt, from Wednesday. Select cuts dipped seven cents to $233.53, the U.S. Department of Agriculture said.

Spot-August futures closed 2.225 cents/lb. higher at 144.650 cents, and October 2.175 cents higher at 142.55 cents.

CME August feeder cattle, which expired at noon CT, settled down 0.275 cents/lb. at 210 cents and below CME’s feeder cattle index for Aug. 26 at 211.05.

September feeder cattle, the new lead month, ended 2.25 cents higher at 200.35 cents, and October 2.725 cents higher at 197.075, fueled by live cattle futures upswing.

Mostly weak hog futures

CME lean hogs’ discount to the exchange’s hog index for Aug. 24 at 78.79 cents underpinned the October contract, traders said.

Soft cash and wholesale pork values pressured remaining hog months, they said.

The spot-October contract closed up 0.05 cent/lb., to 67.05 cents, December 0.25 cent lower at 62.05 cents and February down 0.2 cent at 66.425.

“It’s been a frustrating and difficult trade,” said JBS Trading president James Burns, citing futures’ discount versus bearish fundamentals.

USDA reported the morning’s western Midwest average cash hog price at $73.37/cwt, 94 cents lower than on Wednesday.

Thursday afternoon’s wholesale pork price was at $85.36/cwt, down 47 cents from Wednesday, USDA said.

Farmers marketed their hogs ahead of time to avoid possibly lower prices in advance of plant closings during the Labor Day holiday, an analyst said.

Grocers reduced pork purchases for Labour Day grilling demand as the holiday approaches, he said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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