Chicago | Reuters –– Chicago Mercantile Exchange live cattle gained Wednesday on short-covering following a snapback in wholesale beef values, traders said.
June closed up 0.5 cent per pound to 151.975 cents, and August one cent higher at 150.65 cents (all figures US$).
Wednesday morning’s choice wholesale beef price climbed $1.73 per hundredweight (cwt) from Tuesday, to $262.69. Select cuts rose $1.38, to $249.13, the U.S. Department of Agriculture said.
Retailers preparing for U.S. Memorial Day holiday grilling were primarily behind the run-up in wholesale beef prices, said Vetterkind Cattle Brokerage president Troy Vetterkind.
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Futures’ discounts to last week’s prices for market-ready (cash) cattle lured investors.
On Wednesday, cash cattle bids in Kansas surfaced at $157 to $158/cwt versus $163 asking prices there. Last week, overall U.S. Plains cash prices were mostly $161 to $164.
More cattle for sale and animals contracted against the futures market give packers leverage, Vetterkind said.
From Monday to Wednesday, packers processed 10,000 more cattle than last week at 339,000 head, based on USDA estimates.
Funds trading CME’s live cattle and hog markets periodically sold, or rolled, June long positions and bought deferred months in a procedure known as the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI) roll.
Wednesday is the last official day for the S+PGSCI roll process.
CME feeder cattle drew support from technical buying, live cattle market gains and this week’s steady to $3/cwt higher cash feeder cattle prices.
May closed 1.05 cents/lb. higher at 218.75 cents.
Hogs finish mixed
The CME May lean hog contract was guided by ideas about where it will settle following its Thursday expiration, traders said.
Wednesday’s cash and wholesale pork price drop pressured June futures that will assume lead-month status after May expires, they said.
May hogs closed up 0.075 cent/lb. to 81.375 cents/lb., and June 0.275 cent lower at 84.775 cents.
USDA reported Wednesday morning’s average cash hog price in Iowa/Minnesota fell 65 cents/cwt from Tuesday to $80.10.
Separate government data quoted the morning’s wholesale pork price at $82.99/cwt, 68 cents lower than on Tuesday.
Wholesale meat buyers may have resisted spending more for pork after booking most of what they need for the U.S. Memorial Day holiday, an analyst said.
Processors who are snug on inventories for the week are less likely to spend more for supplies, especially if pork demand eases, he said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
