Chicago Mercantile Exchange (CME) live cattle gained modestly on Friday as futures’ discount to cash prices lured buyers, traders and analysts said.
CME live cattle finished almost flat for the week. Short-covering offset early-week market losses led by lower cash cattle and wholesale beef values.
Spot April live cattle closed 0.275 cent per pound higher, at 125.85 cents (all figures US$). Most-actively traded June ended at 120.75 cents, up 0.1 cent.
Cash prices fell shy of investors’ expectations but were still at a premium to futures, a trader said.
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Cash cattle in the U.S. Plains traded at $127-$128 per hundredweight (cwt), down $1 to $2 from last week, feedlot sources said.
Packers this week periodically cut slaughters to counteract tighter cattle numbers and shore up their sagging bottom lines.
U.S. beef packer margins on Friday were estimated at a negative $53.55 per head versus a negative $54.70 on Thursday and a negative $41.90 a week ago, according to HedgersEdge.com.
Wholesale beef prices drew pressure from the wet, cold start to spring that delayed cookouts.
The U.S. Department of Agriculture on Friday reported the average wholesale choice beef price at $189.52/cwt. It was down 63 cents from Thursday and $1.80 lower than a week ago.
The same data showed select beef cuts at $184.14, up 15 cents from Thursday but down $2.87 from last week.
Feeder cattle futures lost ground for a fourth straight day, weighed down by weak far-month live cattle contracts and higher corn prices.
CME feeder cattle ended 2.7 per cent lower for the week, their biggest weekly loss since the 2.8 per cent registered for the week to Feb. 10.
Spot April feeder cattle settled down 1.3 cents/lb. at 137.925 cents. Most-actively traded May closed at 140.925 cents, 0.85 cent lower.
Hogs up on cash hopes
CME hogs closed higher on short-covering in anticipation of possibly higher cash prices early next week, analysts and traders said.
Tight seasonal supplies and grocers stocking up for spring grilling demand could prompt packers to raise bids for supplies soon, a trader said.
Unprofitable margins and slack pork demand had caused packers to lower bids recently, he said.
A Minnesota hog-packing plant lost power on Thursday and Friday morning after a snowstorm, limiting its need for supplies, industry sources said. The plant will make up for the downtime on Saturday, they said.
Government data on Friday showed the average hog price in the most-watched Iowa/Minnesota market down $2.65/cwt at $79.32.
Friday afternoon’s mandatory wholesale pork price, calculated on a plant-delivered basis, was $81.19/cwt, down $1.24 from Thursday, according to USDA.
The government will discontinue its little-used voluntary pork price data as of Friday.
CME hogs ended up 2.8 per cent for the week.
Spot April hogs, which expired at noon CT, settled 0.625 cent higher at 82.225 cents. They finished slightly above the CME lean hog index, which was at 81.39 cents.
Most-actively traded June, the new lead contract, finished at 89.9 cents, up 0.45 cent.
— Theopolis Waters writes for Reuters from Chicago.
