Chicago | Reuters — Chicago Mercantile Exchange live cattle closed higher on Tuesday following improved wholesale beef values and futures’ discount to last week’s cash prices, traders said.
April closed 0.55 cent per pound higher at 163 cents, and June was up 0.575 cent at 152.325 cents (all figures US$).
Tuesday morning’s choice wholesale beef price climbed 91 cents per hundredweight from Monday, to $257.39. Select cuts rose 53 cents, to $252.08, according to the U.S. Department of Agriculture.
Last week, market-ready (cash) cattle in the U.S. Plains traded $167 to $169/cwt, feedlot sources said.
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Packers passed higher cattle costs on to grocers who are booking beef for spring grilling and as restaurants buy product for Mother’s Day, said analysts.
Subsequent market gains trumped initial selling driven by anticipation of a seasonal increase in cattle supplies.
Traders are skeptical that the cash market will hold at current price levels, said Doane Advisory Services economist Dan Vaught. But the longer cash prices remain strong, the cheaper futures appear compared with cash, he said.
Late-session futures buying returned June and August contracts above their respective 20-day and 100-day moving averages, which triggered modest fund buying.
CME feeder cattle slumped on fund liquidation and April selling ahead of its expiration on April 30.
Futures’ premium to the exchange’s feeder cattle index for Monday at 221.23 cents discouraged buyers.
April closed 2.125 cents/lb. lower at 217.675 cents.
Weaker hog futures
CME lean hogs sagged on near-term cash price uncertainty and futures’ premium to the exchange’s latest hog index at 59.64 cents, traders said.
April closed 0.675 cent/lb. lower at 62.575 cents, and May was down 0.2 cent at 69 cents.
Cash hogs in the Midwest on Tuesday morning sold mostly steady with Monday’s prices, said regional hog dealers.
Packing plants that were closed on Good Friday and Easter Monday returned to normal operations on Tuesday, dealers said.
On Tuesday, packers processed 433,000 hogs, up 7,000 from a week ago and 17,000 more than a year earlier, based on USDA data.
A few processors need hogs to round out this week’s production, according to dealers.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago. Additional reporting for Reuters by Meredith Davis in Chicago.
