Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose modestly on Tuesday, helped by inclement weather in the western corn belt that delayed delivery of livestock to packing plants, said traders.
Blizzard conditions in the central U.S. shut down some Cargill and Tyson Foods beef and pork processing plants in the region, company spokesmen told Reuters on Tuesday.
The U.S. Department of Agriculture estimated Tuesday’s cattle slaughter at 80,000 head, 32,000 fewer than a week ago.
Some of the day’s kill reduction was weather related, but some packers intentionally cut slaughters to improve their margins and drive up wholesale beef values, said CHS Hedging analyst Steve Wagner.
Last week, cash cattle in the southern U.S. Plains brought $138/cwt (all figures US$).
Tuesday’s average beef packer margin was a negative $27.75 per head, down from a negative $22.55 for Monday and a positive $19.85 a week ago, as calculated by HedgersEdge.com.
The morning’s wholesale choice beef price surged $2.84/cwt from Monday, to $223.36. Select cuts jumped $2.27, to $217.93, based on USDA data.
Market participants cited the plunge in U.S. equities for minimizing CME livestock market advances.
February live cattle closed up 0.05 cent/lb. to 135.725 cents, and April ended 0.325 cent higher at 134.75.
CME’s feeder cattle contracts drew support from firm cash feeder cattle prices. March feeders closed up 0.075 cent/lb. to 157.85.
Hog futures finish lower
Sell stops and technical selling sent CME lean hogs lower, traders said.
Spot February finished 1.15 cents/lb. lower at 64.2 cents, April ended 1.6 cent lower at 69.1.
Traders are closely monitoring near-term cash and wholesale pork prices in response to weather-related shutdowns at some packing plants.
Packers processed 315,000 hogs on Tuesday, down from 440,000 a week earlier, based on government estimates.
Traders said grocers and restaurants are preparing to feature pork for Valentine’s Day dining, while end users buy hams ahead of the Easter holiday.
The morning wholesale pork price on Tuesday was up 65 cents/cwt from Monday, to $77.10, with cost increases for all categories except pork bellies and picnic shoulder cuts, USDA said.
Cash hogs in the Midwest on Tuesday morning traded mostly steady to up 50 cents/cwt, according to regional hog dealers.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.