Chicago/Reuters – Chicago Mercantile Exchange live cattle futures climbed on Thursday to a one-year top for the third straight day, and deferred contracts marked fresh highs, helped by firmer wholesale beef values, traders said.
April live cattle closed 1.700 cents per pound higher at 129.625 cents. June ended 0.525 cent higher at 116.475 cents and hit a new high of 117.475 cents.
Thursday morning’s average wholesale beef price was up 20 cents per cwt to $215.37 from Wednesday.
Select cuts jumped $1.58 to $203.58, the U.S. Department of Agriculture said. Retail beef buying picked up as grocers feature product for spring grilling while stocking up for mid-May Mother’s Day meal advertisements.
Futures benefited from their discounts to this week’s prices for market-ready, or cash, cattle.
“If the cash market keeps moving up, it’s hard for futures to move lower because you already have these discounts in the market,” said U.S. Commodities analyst Don Roose.
Processors this week paid $130 to $133 per cwt for cash cattle that a week earlier sold for mostly $128, said feedlot sources.
Tight supplies in parts of the Plains forced cash prices upward, said traders and analysts. They said profitable packer margins emboldened feedlots to hold out for better money for their animals. Some market participants adjusted positions ahead of Friday’s USDA monthly Cattle-On-Feed report.
Profit-taking undercut CME feeder cattle futures, which earlier spiked to new highs led by live cattle market gains. April feeder cattle closed 0.775 cent per pound lower at 137.900 cents.
May ended down 0.575 cent at 139.750 cents and earlier made a new high of 143.000 cents.
Hogs sink to new lows
CME lean hogs maintained their recent string of posting new monthly lows, pressured by slumping cash prices amid plentiful seasonal supplies, said traders.
Market bulls expect cash prices to bottom out after packers process the glut of pigs resulting from Easter-holiday plant closures that backed up animals on farms.
May closed 2.075 cents per pound lower at 63.800 cents, and hit a seven-month low. Most-actively traded June ended 1.2875 cents lower at 68.675 cents, their lowest in six months.
Thursday morning’s average cash hog price in Iowa/Minnesota was at $54.91 per cwt, 74 cents lower than on Wednesday, the USDA said.
U.S. government data on Thursday morning showed the average wholesale pork price up 55 cents per cwt from Wednesday to $75.34, mostly due to $4.25 higher pork bellies.