Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed firmer on Wednesday, with support from short-covering tied to futures’ discounts to preliminary cash prices, said traders.
April live cattle closed 0.575 cent/lb. higher at 121.35 cents, and June up 0.25 cent to 111.85 cents (all figures US$).
Market-ready, or cash, cattle at Wednesday morning’s Fed Cattle Exchange yielded an average of $131.17/cwt, down from last week’s $133.35 average.
On Tuesday some cash cattle in Texas and Kansas brought $123 to $126/cwt versus mostly $130 there last week, said feedlot sources.
Packer bids for remaining cattle in the U.S. Plains stood at $126/cwt versus up to $133 asking prices, said feedlot sources. Plains cash cattle a week ago mostly sold from $130 to $134.50.
Processors resisted paying more for cattle while wrestling with declining margins and tepid seasonal wholesale beef demand, said traders and analysts.
They said cattle supplies are tight in parts of the Plains, but packers can draw from huge numbers of animals contracted against the futures market.
Wednesday morning’s average wholesale beef price dropped 50 cents/cwt from Tuesday at $219.07. Select cuts fell $1.25, to $211.77, the U.S. Department of Agriculture said.
Wednesday’s average beef packer margins were a positive $43.35 per head, down from a positive $116.45 a week ago, as calculated by HedgersEdge.com.
Live cattle futures gains, and higher cash feeder cattle prices, drove up CME feeder cattle contracts.
March feeder cattle, which will expire on Thursday, ended up 0.95 cent/lb. to 133.3 cents. Most actively traded April finished 1.45 cents higher at 134.4 cents.
Firmer hog futures close
Short-covering and bargain buying halted nearby CME lean hog contracts’ three-session decline prompted by recently slumping cash and wholesale pork prices, said traders.
Deferred-month investors adjusted positions before USDA’s quarterly hog report on Thursday at 2 p.m. CT.
April hogs ended up 0.2 cent/lb. to 65.3 cents, and May up 0.075 cent to 69.475 cents.
More hogs are available as spring temperatures moderate in the Midwest, which allows pigs to add weight faster, said analysts and traders.
They said increased supplies have retailers waiting for pork prices to come down before actively purchasing product for spring grilling demand.
U.S. government data on Wednesday morning showed the average wholesale pork price $1.84/cwt lower than on Tuesday to $75.77, led by $3.11 lower loins.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.