Chicago | Reuters –– Chicago Mercantile Exchange feeder cattle futures on Friday hit a record high, boosted as corn prices fell after the government’s bearish crop report, traders said.
U.S. corn futures fell more than one per cent after the U.S. Department of Agriculture’s forecast for rising global supplies.
Cheaper feed could ease input costs for feedlot operators.
Profit-taking, with the view that CME feeder cattle are close to topping out, might undercut futures on Monday, traders said.
May closed 1.075 cents per pound higher at 184.575 cents, and August ended up 1.1 cents at 191.375.
Live cattle gain on discounts
CME live cattle futures ended higher, fuelled by their discounts to prices for market-ready, or cash, cattle, traders said.
June closed up 0.125 cent/lb. at 138.05 cents, and August 0.6 cent higher at 138.2.
On Friday, cattle in Texas and Kansas fetched $146 per hundredweight (cwt), steady with a week ago, feedlot sources said. They reported cash cattle sales of $148 to $149 in Nebraska, compared to $147 to $150 last week.
Packers’ need for cattle outweighed negative margins and sluggish wholesale beef demand, traders and analysts said.
The wholesale choice beef price late on Friday dropped $2.39/cwt from Thursday to $223.26. Select cuts slipped 30 cents to $212.21, based on USDA data.
Funds trading in CME hogs and live cattle futures shifted June long positions into back months in a procedure known as the “roll” by followers of the Standard + Poor’s Goldman Sachs Commodity Index (S+P GSCI).
Friday was the third of five days for the index roll process.
CME live cattle may open mixed on Monday as investors mull futures’ discount to cash returns and a looming seasonal buildup in supplies, traders said.
Short-covering lifts hogs
CME hogs finished mostly higher on short-covering following eight straight losing sessions pegged to lower cash prices, traders said.
They said packers have supply needs met into early next week while having a hard time moving pork as wetter than usual weather delayed the start of spring grilling.
The afternoon’s average hog price in the Iowa/Minnesota market dropped $3.34 per cwt from Thursday to $108.27, according to the USDA.
Separate government data showed the morning’s wholesale pork price dipped 35 cents per cwt from Thursday to $111.73.
On Monday, May futures, which will expire on May 14, will track CME’s hog index at 114.29 cents, trader said.
Remaining months could trade mixed based on their premiums to cash prices and a tight supply outlook.
May hogs closed down 0.225 cent/lb. at 114.675.
June finished up 0.025 cent at 120.175 cents, and July 1.125 cents higher to 124.55.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.