Chicago/Reuters – Chicago Mercantile Exchange live cattle futures rose on Wednesday, hitting a 4-1/2-month high, with traders citing strong wholesale beef demand and steady-to-firmer preliminary cash prices.
December live cattle, which will expire on Friday, closed up 1.025 cents per pound to 115.975 cents.
Most actively traded February ended up 1.375 cents to 117.375 cents.
Wednesday morning’s choice wholesale beef price, or cutout, surged $2.90 per cwt from Tuesday at $201.44. Select cuts were up $1.96 to $193.23, the U.S. Department of Agriculture said.
Slaughter-ready, or cash, cattle at Wednesday morning’s Fed Cattle exchange brought $115 to $116.75. Last week, cash cattle in the U.S. Plains fetched $114 to $116 per cwt.
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“As is always the case this time of year, packers are intent on getting and keeping inventory around them as they prepare for ramping up weekly kills in January,” said Cassandra Fish, author of industry blog The Beef.
Investors look for remaining cattle to bring steady-to-better prices given profitable packer profits and the recent beef cutout price rally.
Average beef packer margins for Wednesday were a positive $80.60 per head, up from a negative $3.30 a year earlier, as calculated by HedgersEdge.com.
Fund buying, lower corn prices and higher live cattle futures drove up CME feeder cattle. January feeders closed 1.775 cents per pound higher at 131.725 cents.
Mostly lower hog close
CME lean hog traders simultaneously sold deferred months and bought February futures following last Friday’s bearish USDA quarterly hog report.
February hogs ended up 0.350 cent per pound to 65.100 cents.
April 0.700 cent lower at 66.075 cents, and May 0.750 cent lower at 70.950 cents.
Market participants are keeping close tabs on cash and wholesale pork prices as packing plants prepare to close for the long New Year’s holiday weekend.
“Packers don’t need a lot of extra hogs, but sure want to keep pigs coming in because of their margins and product sales,” an Ohio hog merchant said.
Wednesday morning’s prices for cash hogs in the U.S. Midwest were unchanged, dealers said.
U.S. government data on Wednesday morning showed the average wholesale pork price up 12 cents per cwt from Tuesday to $82.18.
