Chicago | Reuters –– Chicago Mercantile Exchange live cattle climbed for a second straight session on Thursday, fuelled by short-covering and positioning on the eve of the last trading day of May, traders said.
June closed 1.025 cents per pound higher at 153.5 cents, and August up 1.325 cents to 152.75 cents (all figures US$).
The steep run-up in feeder cattle futures may have helped CME live cattle, traders and analysts said.
And, they said, live cattle futures’ discounts to last week’s prices for market-ready (cash) cattle provided more support.
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On Thursday, cash bids in Kansas stood at $156 to $157 per hundredweight (cwt) against $163 to $164 asking prices there and elsewhere in the U.S. Plains. Last week, cattle in the Plains traded at mostly $159 to $161.
CME live cattle gained further after nearby contracts topped Wednesday’s highs, which triggered buy stops.
Thursday’s wholesale beef price relapse, and anticipation of packers spending the same or less for cattle this week stirred bear spreading.
The spreads consisted of traders who sold the June contract and simultaneously bought deferred months, which earlier spiked August futures to a 4-1/2-month high.
Thursday morning’s choice wholesale beef price shed 93 cents/cwt from Wednesday, to $260.18. Select cuts slumped $1.40, to $248.48, the U.S. Department of Agriculture said.
Wet weather around the Midwest may have hurt meat demand for grilling, said Wagnon Commodities owner Lynn Wagnon.
Buy stops and live cattle futures’ advances sent CME feeder cattle nearby contracts to their highest in 4-1/2-months.
August ended up 3.525 cents, to 224.95 cents, and September 3.075 cents higher at 223.25 cents.
Hogs up despite bearish fundamentals
CME lean hogs gained for the second day in a row on buy stops, fund buying and short-covering, traders said.
June closed up 0.825 cent/lb. to 84.6 cents. July finished 1.3 cents higher at 84.625 cents, after breaking through the 20-day moving average of 83.52 cents.
Hog futures’ rally overshadowed cash price uncertainty and sharply lower wholesale pork values.
Midwest cash hogs sold mostly steady Thursday morning amid mixed packer demand, regional hog dealers said.
An electrical outage idled a South Dakota hog packing plant late Wednesday and on Thursday.
USDA data quoted the morning’s wholesale pork price at $84.63/cwt, $2.65 lower than on Wednesday.
Grocers are slowly restocking meat cases after the U.S. Memorial Day holiday and before Father’s Day in June, traders said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
