Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts closed firmer on Wednesday as investors digested initial prices for slaughter-ready, or cash, cattle while bracing for hefty supplies ahead, said traders.
Market participants are also monitoring forecasts for a weekend snowstorm in the northern U.S. Plains that could disrupt livestock production in the region into early next week.
April live cattle closed up 0.7 cent/lb. at 113.5 cents (all figures US$). June ended down 0.525 cents at 101.575 cents. August finished up 0.075 cent at 102.375.
A small number of cattle in the Plains, including at Wednesday’s Fed Cattle Exchange, brought $114-$118/cwt versus $116-$118 a week earlier.
Packer bids for remaining cattle were at $116/cwt against $120 asking prices from sellers.
Wednesday’s sale of cattle at the low end of range had mud on them, which were discounted by packers because of the extra time involved in cleaning the animals, a feedlot source said.
Other packers bought cattle for later delivery, suggesting they either have enough supplies now or waiting for bigger numbers to arrive, a trader said.
Despite their higher margins, packers balked at paying more for cattle until wholesale beef prices show signs of bottoming out seasonally, said traders and analysts.
CME feeder cattle drew support from firmer back-month live cattle futures and higher cash feeder cattle prices.
April closed 0.45 cents/lb. higher at 135.275 cents.
Hogs finish mostly higher
CME hog market investors sold April futures, which will expire Friday, and simultaneously bought deferred months after cash hog prices rose for a fifth straight session, said traders.
Fund buying surfaced after May and June topped their 20-day moving average resistance levels of 67.492 and 75.533 cents, respectively.
April hogs closed down 0.2 cent/lb. at 53.3 cents. May ended 0.475 cent higher at 67.925 cents, and most actively-traded June finished 0.725 cent higher at 75.775 cents.
Some packers competed for hogs while taking advantage of their impressive margins, but others processed as many pigs as possible before winter-like weather slams into parts of the Midwest over the weekend, a trader said.
— Reporting for Reuters by Theopolis Waters in Chicago.