U.S. livestock: CME live cattle futures climb as cash price outlook improves

(Photo courtesy Canada Beef Inc.)

Chicago/Reuters – Chicago Mercantile Exchange live cattle futures on Thursday gained for a third straight day, driven by short-covering following renewed optimism for cash prices by Friday, traders said.

December and February contracts broke through their respective 10-day moving averages of 102.90 and 104.86 cents, which triggered fund buying.

December live cattle closed 1.025 cents per pound higher at 104.500 cents, and February 0.825 cent higher at 105.500 cents.

Slaughter-ready, or cash, cattle bids in the U.S. Plains were $101 per cwt versus up to $108 asking prices, said feedlot sources. Last week cash cattle sold at $102 to $105.

Slipping but still hefty packer profits and Thursday morning’s U.S. Department of Agriculture bullish weekly export sales results are supportive cash price factors.

The prospect of increased beef demand as the winter holidays approach, and Wednesday’s $103 to $104.25 per cwt Fed Cattle Exchange prices, furthered futures buying.

Market participants said the Dow’s surge to an all-time high on Thursday after Donald Trump’s unexpected U.S. presidential win contributed to CME livestock market gains.

“When those index funds buy stocks for their clients, they have to buy an entire basket of commodity futures, which means cattle and hogs as well,” said independent CME livestock futures trader Dan Norcini.

November feeders, which will expire on Nov. 17, finished up 0.650 cent per lb to 125.200 cents. Most actively traded January ended 0.600 cent higher at 120.325 cents.

CME feeder cattle futures drew strength from fund buying and the live cattle market advances.

Hog futures rally late

Thursday morning’s steady cash returns and wholesale pork price upswing later pared CME lean hogs’ initial profit-taking lows, said traders.

December closed 0.825 cent per pound higher at 47.375 cents, and above the 10-day moving average of 47.01 cents. February ended up 0.500 cent per lb to 54.575 cents.

Thursday morning’s wholesale pork price, or cutout, jumped $1.91 per cwt from Wednesday to $75.73, following a $7 hike in ham prices, the USDA said.

“Everyone I’ve talked to basically is really getting worn out waiting for the cutout to break,” said Rosenthal Collins broker Jim Burns, citing ample supply and adequate packer inventory.

Some analysts and traders attributed resilient pork demand to robust U.S. exports and unusually mild fall weather that may have inspired consumers to barbecue beyond the summer Labor Day holiday.

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