Chicago/Reuters – Chicago Mercantile Exchange live cattle futures on Thursday surged to a six-month high, fuelled by the recent rally in wholesale beef values and steady-to-firmer cash price expectations for unsold cattle, said traders.
December live cattle, which will expire on Friday, closed 2.725 cents per pound higher at 118.700 cents.
Most actively traded February ended up 0.575 cent to 117.950 cents.
Thursday morning’s choice wholesale beef price rose $1.52 per cwt from Wednesday to $203.36.
Select cuts were up 56 cents to $193.71, the U.S. Department of Agriculture said.
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On Thursday, packer bids for slaughter-ready, or cash, cattle in Kansas surfaced at $114 per cwt against up to $120 asking prices, said feedlot sources. That came after $115 to $116.75 sales at Wednesday’s Fed Cattle Exchange.
Cash cattle in the U.S. Plains last week traded at $114 to $116 per cwt.
“Cash being a little stronger than people thought is part of the rally. And it’s supposed to turn a little nasty with cold and snow in parts of the Plains next week,” said Vetterkind Cattle Brokerage president Troy Vetterkind.
Inclement wintry weather tends to slow down animal weight gains and disrupt the transportation of livestock to packing plants. CME’s January feeder cattle contract was supported by higher live cattle futures, but back-months slipped on profit-taking.
January feeders closed up 0.200 cent per pound to 131.925 cents. March ended down 0.150 cent to 126.800 cents, and April down 0.075 cent to 126.325 cents.
Mostly higher hog settlement
Thursday morning’s weaker cash and wholesale pork prices, amid ample supplies, reversed initial bull spreads in CME’s lean hog market, said traders.
Investors earlier this week implemented bull spreads, which consisted of buying the February contract and selling deferred months, based on strong cash and wholesale pork values.
Furthermore, on Tuesday and Wednesday market participants liquidated their back-month long positions and bought February futures in response to last Friday’s bearish USDA quarterly hog report.
Thursday morning’s wholesale pork price sagged $1.07 per cwt from Wednesday to $81.17, the USDA said.
Separate U.S. government data showed Thursday morning’s average cash hog price in Iowa/Minnesota at $51.66 per cwt, $1.86 lower than on Wednesday.
February hogs ended down 0.450 cent per pound to 64.650 cents. April closed up 0.150 cent to 66.225 cents, and May 0.700 cent higher at 71.650 cents.
