Chicago | Reuters — For a second straight session most Chicago Mercantile Exchange live cattle contracts finished in modest positive territory on Tuesday pegged to bear spreading and speculative buying, traders said.
The spreads consisted of traders who sold June futures ahead of its expiration on June 30 and simultaneously bought deferred months.
June closed down 0.125 cent per pound, to 152.05 cents, August up 0.1 cent to 151.225 cents and October ended 0.15 cent higher at 153.65 cents (all figures US$).
Strong wholesale beef values provided futures support, while cash price uncertainty given more cattle for sale this week weighed on contracts.
Tuesday afternoon’s wholesale choice beef price jumped $2.14/cwt from Monday, to $249.47. Select cuts rose $2.10, to $242.56, the U.S. Department of Agriculture said.
Cash bids surfaced in Kansas at $150/cwt, against at least $155 asking prices there and elsewhere in the U.S. Plains, feedlot sources said. Last week, cash cattle fetched $152-$155.
Based on higher wholesale beef values, “I don’t know why anyone as a seller would be interested in selling cattle $2 lower,” said Livestock Marketing Information Center director Jim Robb.
Some packers may pay the same as last week for supplies as long as their margins improve and retailers top off beef inventories for Father’s Day, traders and analyst said.
On the other hand, 10,000 more cattle for sale this week, and a few processors cutting kills due to overall tight supplies, might pressure cash prices in parts of the Plains, they said.
Live cattle market advances stirred CME feeder cattle futures buying.
August ended 0.95 cent/lb. higher at 224.85 cents.
Mixed hogs settlement
CME lean hogs were pressured by lower cash prices, but supported by higher wholesale pork values, traders said.
July closed down 0.05 cent/lb. to 77.15 cents, and August up 0.075 cent to 75.55 cents.
USDA reported Tuesday afternoon’s average cash hog price in Iowa/Minnesota down 42 cents/cwt from Monday to $77.63.
Separate government data showed the afternoon’s wholesale pork price at $86.03/cwt, up $1.42 from Monday fuelled by $6.03 higher pork bellies.
Packers have enough hogs for this week, while pork wholesalers conducted fill-in Father’s Day business, a trader said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.