Chicago | Reuters — Chicago Mercantile Exchange live cattle posted significant gains on Monday, led by strong wholesale beef prices and anticipation of steady or better cash prices this week, traders said.
December closed 1.75 cents per pound higher at 166.5 cents, and February up 2.525 cents at 165 cents (all figures US$).
Monday morning’s choice wholesale beef price rose 85 cents per hundredweight (cwt) from Friday to $245.37. Select was up 83 cents to $236.44, according to U.S. Department of Agriculture data.
On Monday, market-ready or cash cattle bids surfaced in the U.S. Plains at $160 to $162/cwt against asking prices over $166, said feedlot sources. Last week, cash cattle sold at $162 to $164.
It will be tough selling cattle below last week’s prices given futures’ recent rally and solid wholesale beef demand, a feedlot source said.
Packers are buying supplies for the first full week of production in two weeks.
Supermarkets bought beef to insure themselves of supplies during plant closures over the Christmas and New Year’s holidays.
Fund buying occurred after February and April broke through the 20-day moving average of 162.81 cents and 162.22 cents, respectively.
CME live cattle may be poised for a selloff on year-end positioning and after investors price in this week’s cash trade, traders and analysts said.
Thinly-traded CME feeder cattle drew support from short-covering, live cattle market gains and technical buying.
January closed up 3.725 cents/lb. at 217.45 cents, and March 3.775 cents higher at 215.675 cents.
Hogs edge upward
CME hogs ended in positive territory, with support from buy stops and short-covering, traders said.
February closed up 0.25 cents/lb. to 81.8 cents, and April 0.45 cents higher at 84.65 cents.
Speculators bought futures in anticipation of an upturn in prices as frigid temperatures this week in the U.S. Midwest force producers to keep swine doors closed to retain heat.
And packers will need to replenish inventories when plants return to normal slaughter schedules after the New Year’s holiday.
Monday morning’s prices for slaughter hogs in the Midwest were steady to down 50 cents/cwt, according to regional hog dealers.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.