Chicago/Reuters – Chicago Mercantile Exchange live cattle futures on Thursday climbed to a four-month high for a second day in a row, fuelled by short-covering and stronger-than-anticipated cash prices, said traders.
CME livestock futures will close early on Friday and will be closed on Monday in observance of the Christmas holiday.
December live cattle closed up 0.725 cent per pound to 114.000 cents. Most actively traded February ended up 0.575 cent to 116.800 cents.
On Thursday, the bulk of slaughter-ready, or cash, cattle in the U.S. Plains brought $114 to $116 per cwt, up from mostly $112 last week, said feedlot sources.
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Highly profitable packer margins, fewer cattle for sale than last week and improved wholesale beef demand offered incentives for packers to pay more for supplies.
Futures gave the impression of being overbought, but the market simply responded after “getting beat up” a month or so ago when cash prices were much lower, said JRS Consulting owner Jack Salzsieder.
Some investors may pocket profits on Friday before the long Christmas holiday weekend and the U.S. Department of Agriculture’s monthly Cattle-On-Feed report at 11:00 a.m. CST (1700 GMT).
USDA will simultaneously issue its monthly cold storage report, including total November beef and pork inventories. On average, a few analysts estimated last month’s total beef stocks at 544.6 million lbs and pork at 566.1 million lbs.
Technical buying and firmer live cattle futures boosted CME feeder cattle contracts. January feeders closed 0.900 cent per pound higher at 131.125 cents.
Weaker hog settlement
CME lean hog futures posted modest losses on profit-taking following weaker cash and wholesale pork values, said traders.
February hogs ended down 0.175 cent per pound to 64.725 cents, and April 0.275 cent lower at 67.725 cents.
Thursday morning’s cash hog prices in Iowa/Minnesota averaged $52.86 per cwt in light volume, down 97 cents from Wednesday, the USDA said.
Separate government data on Thursday morning showed the average wholesale pork price dropped 65 cents per cwt from Wednesday to $79.57.
“I’d imagine they (packers) could use a few pigs to round out the week. But most of them (packers) are full through next week with the shortened holiday kills,” an Ohio hog merchant said.
Traders and analysts said supermarkets have almost concluded pork purchases heading into winter holidays.
Market participants anxiously await the government’s quarterly hog report, which also will be published on Friday at 11:00 a.m. CST (1700 GMT).
