U.S. livestock: CME live cattle up again on cash prices, USDA report

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures finished higher for a fifth straight session on Monday, fuelled by last week’s better-than-expected cash prices, traders said.

Packers paid $163 to $165 per hundredweight (cwt) for market-ready or cash cattle in the U.S. Plains on Friday, up from $161 to $162.50 the previous week, feedlot sources said (all figures US$).

Friday’s mildly bullish U.S. Department of Agriculture Cattle on Feed report for February provided more support to futures.

April and June live cattle surpassed their 100-day moving averages of 158.82 and 150.96 cents per pound, which triggered fund buying.

“We’ve got bullish chart indicators, but I’m not too excited about the longer-term fundamentals,” said Allendale Inc. chief strategist Rich Nelson, citing more cattle possibly coming to market during the summer.

Profit-taking and uncertainty about this week’s cash prices, given fading packer margins and lacklustre wholesale beef demand, periodically slowed futures advances.

Monday morning’s choice wholesale beef price climbed $1.10/cwt from Friday, to $245.61. Select cuts dropped 45 cents, to $242.83, the USDA said.

April closed up by the three cents/lb. price limit at 161.35 cents. June ended 2.525 cents higher at 153 cents.

Futures’ limit will be expanded to 4.5 cents on Tuesday after April’s limit-up settlement Monday.

USDA will issue its monthly cold storage report Monday at 2 p.m. CT, which will include total February beef and pork inventories.

A few analysts estimated last month’s total beef stocks on average at 495.2 million lbs., and pork stocks at 637 million lbs.

CME feeder cattle rose with active live cattle futures buying and with cash feeder cattle rising as much as $5/cwt.

March closed 2.1 cents/lb. higher at 216.975 cents, and April was up 2.975 cents at 219.175 cents.

Hogs end firmer

Bargain hunting and short covering lifted CME lean hogs from session lows, traders said.

April closed 0.8 cent/lb. higher at 59.25 cents, and May was 0.4 cent higher, at 68.675 cents.

Some investors bought futures in anticipation of a cash price turnaround as some shoppers switch from costly beef to competitively priced pork, a trader said.

On Monday morning, cash hogs in the Midwest sold mostly steady to down 50 cents/cwt, dealers said.

The morning’s wholesale pork price gained 59 cents/cwt from Friday to $68.62, according to USDA.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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