Chicago | Reuters — Chicago Mercantile Exchange live cattle settled higher after Wednesday’s volatile session, supported by the uptick in wholesale beef values and futures’ discounts to this week’s cash prices, said traders.
Futures slipped from session highs due to the looming seasonal bump in supplies and U.S. stocks’ tumble amid renewed trade war fears.
“You’ve got a macro influence in the meats (futures), especially with what’s going on with the trade war potential between both China, and especially with the EU,” said Global Commodity Analytics and Consulting president Mike Zuzolo.
The U.S. exports roughly 25 per cent of the pork and about 13 per cent of the beef it produces, according to industry sources.
April live cattle closed 1.1 cents/lb. higher at 123 cents, and above the 10-day moving average of 122.6 cents (all figures US$). June ended up 0.1 cent, to 113.25.
So far this week slaughter-ready, or cash, cattle in the U.S. Plains traded from $126-$128/cwt, including $127 sales at Wednesday’s Fed Cattle Exchange (FCE) action. Cash cattle last week brought mostly $126.
Some packers may have needed supplies to make good on pre-booked meat orders by retailers in preparation for the start of spring grilling next week, a trader said.
However, some investors were disappointed about the FCE’s low sales volume of cattle that brought $127, said Zuzolo, citing another reason for futures’ pullback from Wednesday’s highs.
Short-covering and firmer live cattle futures stirred CME feeder cattle buying.
March feeders ended 0.5 cent/lb. higher at 142.05 cents.
Hogs finish mostly higher
CME lean hogs ended mostly higher after weaker cash and wholesale pork prices stirred bear spreads, in which investors sold April futures and simultaneously bought deferred contracts, said traders.
They said speculative buying further enhanced deferred hog futures trading months.
April hogs closed 0.85 cent/lb. lower at 66.875 cents. May finished up 0.2 cent at 72.05 cents and June ended 0.875 cent higher at 78.35 cents.
Packers resisted bidding up for hogs with more of them expected to come to market as cold winter weather transitions to warmer spring temperatures, which allows livestock to add weight faster, said analysts and traders.
Ham demand should taper off as a growing number grocers fill inventories for the upcoming Easter holiday, they said.
— Reporting for Reuters by Theopolis Waters in Chicago.