Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures gained for a third straight day on Wednesday, driven by their discounts to recent prices for market-ready or cash cattle, traders said.
April ended up 1.125 cents/lb., to 160.725 cents, and June 1.25 cents higher, at 151.675 cents (all figures US$).
So far this week, cash cattle in Texas and Kansas sold at $162 to $163 per hundredweight (cwt), steady to $3 lower than last week, industry sources said.
They said remaining packer bids in Kansas were at $159 to $162/cwt against $165 to $166 asking prices there and elsewhere in the Plains.
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The bulk of unsold cattle could draw further price pressure as packers focus on returning their margins to the black by reducing production, which may have helped wholesale beef values.
Wednesday morning’s choice wholesale beef price, or cutout, surged $2.18/cwt from Tuesday, to $260.63. Select cuts rose $1.35 at $250.77, the U.S. Department of Agriculture said.
It is difficult to tell whether the cutout price increase was because of recently reduced slaughters or pent-up demand for spring grilling, said AgriVisor Services senior market analyst Dale Durchholz.
Earlier, June futures surpassed the 10- and 20-day moving averages of 151.38 and 151.77 cents, which ignited fund buying.
CME feeder cattle finished higher on technical buying and live cattle futures advances.
April closed 2.025 cents/lb. higher at 215.225 cents.
Hogs tumble, April expires
CME lean hogs closed sharply lower, with the June contract down by the three-cent-per-pound price limit, pressured by their premiums to the exchange’s hog index for April 13 at 61.36 cents, traders said.
April, which expired at noon CT, settled down 0.3 cent/lb., to 62.875 cents. May closed 2.250 cents lower at 69.45 cents and June down three cents, to 75.475 cents.
May and June premiums to the index and cash hog prices seemed wider after April expired, traders said.
USDA data showed the morning’s average cash hog price in Iowa/Minnesota was $62.91/cwt, up 34 cents from Tuesday.
Packers spent more for hogs amid tight supplies, while retailers are eyeing cheaper pork versus more costly beef, traders and analysts said.
Separate government data showed the morning’s wholesale pork price gained 78 cents/lb. from Tuesday to $67.26.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
