Chicago | Reuters — Chicago Mercantile Exchange live cattle rose for a fourth consecutive session on Monday, fueled by short-covering and futures’ discounts to last week’s cash prices, said traders.
Last weekend’s news that China offered to lift its ban on U.S. beef helped spike Chicago Mercantile Exchange over one per cent on Monday. But, futures have since slid from session highs on skepticism whether the Chinese will follow through on their offer.
“There was some initial futures market optimism regarding China. But now it’s wait and see,” said Brock Associates Inc. analyst Doug Houghton.
April live cattle closed 1.05 cents/lb. higher at 121.1 cents, and June ended up 0.5 cent, to 112.3 cents (all figures US$).
Last week, a small number of market-ready, or cash, cattle in the U.S. Plains generally traded at $124-$126/cwt versus mostly $128 to $130 a week earlier.
Market participants again expect softer cash prices this week based on negative packer profits and seasonally slow wholesale beef demand.
There are plenty of cattle for packers that are planning closures over the Easter holiday. Less beef as a result of plant disruptions could help reverse the almost two-week wholesale beef price slide, said traders and analysts.
Monday afternoon’s average wholesale beef price was up 24 cents/cwt, to $207.46, from Friday. Select cuts dropped 89 cents, to $196.60, the U.S. Department of Agriculture said.
CME feeder cattle landed in bullish territory for a third straight session, and back months hit new highs, led by strong cash feeder cattle prices and more live cattle futures gains.
April feeder cattle closed 1.55 cents/lb. higher at 135.3 cents.
Hogs close flat/firmer
Deteriorating cash hog prices weighed on CME April lean hogs, that were also felt pressure after investors sold the contract and simultaneously bought deferred months, said traders.
April hogs, which will expire on April 17, ended unchanged at 63.325 cents. May closed up 0.35 cent, to 69.35 cents. Most-actively traded June settled 0.5 cent higher at 73.275 cents.
Seasonally building supplies, and packers requiring fewer hogs before plants close over the Easter holiday, continued to drag down cash prices, said traders and analysts.
They said some grocers bought pork to avoid potential meat shortages resulting from holiday plant closures.
U.S. government data on Monday afternoon showed the average wholesale pork price up $1.42/cwt from Friday to $76.70, mostly because of $7.95 higher pork bellies.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.