Chicago Mercantile Exchange (CME) live cattle futures finished higher Thursday with support from short-covering after Wednesday’s market losses led by lower cash prices, traders and analysts said.
CME live cattle’s discount to those cash prices and Wednesday’s market slide to new contract lows attracted speculative buyers.
June futures led advances, fueled by bearish spreads that, along with weaker wholesale beef prices, limited spot April’s upward momentum.
Spot April live cattle closed up 0.3 cent per pound to 125.575 cents. Most-actively traded June ended 0.65 cent higher at 120.65 cents (all figures US$).
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So far, cash cattle in Texas and Kansas have traded at $127 per hundredweight (cwt), $1 lower than last week. Prices fell short of steady-to-higher expectations but remained at a premium to futures.
Traders await the sale of cash-basis cattle in Nebraska where packer bids stood at $127/cwt against $130 asking prices, feedlot sources said.
Packers resisted spending more for supplies as their margins and wholesale beef prices continued to struggle.
“We’re not going to get cash to trade anywhere near $130/cwt until we can light a fire under spring grilling,” said Oak Investment Group president Joe Ocrant.
U.S. beef packer margins on Thursday were estimated at a negative $54.70 per head versus a negative $47.20 on Wednesday and a negative $32.60 a week ago, according to HedgersEdge.com.
The U.S. Department of Agriculture on Thursday reported the average wholesale choice beef price down 80 cents/cwt to $190.15. Select cuts dropped $1.58 to $183.99.
CME feeder cattle sagged as spot-April traders exited the contract before it expires on April 25. Periodic firm corn prices pressured remaining contracts.
Spot April feeder cattle settled down 1.275 cents/lb. to 139.225 cents. Most-actively traded May closed at 141.775 cents, 0.55 cent lower.
Hogs mixed; April set to expire
CME spot April hog traders tracked the exchange’s lean hog index, which was at 81.03 cents. The spot month will expire on April 12 at noon CT.
April hogs ended up 0.375 cent to 81.6 cents/lb.
The mix of weak cash hog prices versus firm wholesale pork values put most-actively traded June futures traders on the defensive, analysts and traders said.
While supermarkets may be stocking up for eventual spring grilling features, wintry weather in the northern Plains made it difficult to truck hogs to packing plants, a trader said.
USDA estimated Thursday’s hog slaughter at 398,000 head, 28,000 less than a week earlier and 17,000 fewer than on the same date a year ago.
Government data showed the average hog price in the most-watched Iowa/Minnesota market on Thursday at $81.84/cwt, down 17 cents from Wednesday.
Thursday afternoon’s mandatory wholesale pork price, calculated on a plant delivered basis, was $82.43/cwt, up 36 cents from Wednesday, according to USDA.
— Theopolis Waters writes for Reuters from Chicago.
