Chicago | Reuters — Chicago Mercantile Exchange live cattle closed higher on Thursday led by better-than-expected cash prices that halted the market’s three-session losing skid, said traders.
Fund buying and solid wholesale beef demand contributed to futures advances, they said.
Still, cattle trading months slipped from highs amid lingering worries about a supply buildup in the coming weeks.
June live cattle closed 1.675 cents/lb. higher at 106.525 (all figures US$). August ended 1.55 cents higher at 105.525 cents.
Both contracts settled above their respective 40-day moving average of 106.151 and 105.237 cents.
On Thursday packers in the U.S. Plains paid $125 to $126/cwt for slaughter-ready, or cash, cattle told sold from $118-$126.50 last week.
Feedlots pushed back against less money for their cattle given impressive packer profits and seasonally strong wholesale beef demand, said traders and analysts.
“Packers will buy cattle and sell meat the right way and continue to make money,” said Vetterkind Cattle Brokerage president Troy Vetterkind.
Some investors remained concerned about larger cattle supplies ahead.
But others said lower weekly cattle weights suggest feedlots may have sent livestock to market sooner than they had planned, which could result in fewer animals later.
CME feeder cattle closed up sharply on technical buying and live cattle future’s rebound.
May closed 2.175 cents/lb. higher at 140.8 cents.
Hogs close flat/mixed
Firm cash price expectations underpinned CME’s May hog contract while futures’ premiums to the exchange’s hog index for May 1 at 62.66 cents weighed on other months, they said.
May closed up 0.175 cent/lb. at 67.075 cents. Most actively traded June ended unchanged at 73.5 cents, and July closed down 0.225 cent at 75.675.
Packers may compete for hogs to make good on retail meat orders for spring grilling and upcoming U.S. Memorial Day holiday meat advertisements, a trader said.
Wednesday morning’s wholesale pork values were pressured by a downward adjustment in pork belly prices following their sharp spike on Tuesday, he said.
— Reporting for Reuters by Theopolis Waters in Chicago.