Chicago | Reuters — U.S. live cattle futures gained more than one per cent on Thursday, rebounding from a two-month low on chart-based technical buying and slightly firmer trades in cash cattle markets, traders said.
Most-active CME August live cattle knocked out Wednesday’s session low early in Thursday’s session but found downside support near its 100-day moving average and then bounced higher. The contract settled up 1.4 cents at 114.95 cents/lb., the biggest daily gains in 1-1/2 weeks.
Cattle futures declined for most of June and some investors were bargain hunting, traders said.
Cash cattle traded lightly at $117 in Kansas and $118 in Nebraska, feedlot sources said. That was flat to down $2 from last week and the high end of those trades was seen as a modest improvement from average sales of $117.70/cwt on Wednesday at the online Fed Cattle Exchange (FCE) auction.
“The FCE didn’t trade much at all yesterday, and what little was done was at $117; $118 is better and August (futures) are cheap,” Brugler Marketing and Management president Alan Brugler said by telephone.
CME August feeder cattle futures finished 2.4 cents higher at 144.625 cents/lb.
CME lean hog futures were flat to widely mixed as investors continued to build positions in deferred contract months or roll out of nearby contracts. Most-active August hog futures fell 1.925 cents to 82.650 cents/lb. as traders locked in profits after the contract hit a lifetime high on Wednesday.
CME July hog futures were down 0.575 cent to 91.475 cents/lb., and the contract was nearly at parity with the CME index of the cash hog market of 91.93 cents/lb.
The lean hog index traded at a premium to futures for weeks, prompting investors to buy July hog futures in anticipation that futures would eventually converge with the higher cash sales.
The U.S. Department of Agriculture said prices for hogs in the top market of Iowa and southern Minnesota were up 30 cents to $87.77/cwt.
Prices for wholesale pork and beef both were lower, according to the agency.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.