Chicago/Reuters – Chicago Mercantile Exchange live cattle futures rose on Wednesday for the ninth consecutive session, and hit a one-year high for a second day in a row, after cash prices exceeded expectations, traders said.
April live cattle closed 1.150 cents per pound higher at 127.925 cents, and June up 0.300 cent at 115.950 cents.
On Wednesday packers in the U.S. Plains paid $130 to $133 per cwt for market-ready, or cash, cattle that last week brought mostly $128, said feedlot sources.
Cattle at Wednesday morning’s Fed Cattle Exchange, on average, fetched $128.62 per cwt up from last week’s lightly traded $126 average.
“The retailer is buying meat and he’s not afraid to spend money to do it. That has given the packer the confidence to go out a pay up for cattle,” said CHS Hedging analyst Steve Wagner. He also cited lower cattle weights, which suggests ranchers in parts of the Plains are sending animals to feedlots in a timely fashion.
Wednesday morning’s average wholesale beef price dropped 91 cents per cwt to $215.08 from Tuesday. Select cuts were up 31 cents to $202.51, the U.S. Department of Agriculture said.
CME feeder cattle futures’ premiums to the exchange’s feeder cattle index for April 18 at 136.64 cents weighed on the April contract.
Remaining feeder cattle contracts drew support from firmer deferred-month live cattle futures. April feeder cattle closed unchanged at 138.675 cents per pound. May ended up 0.250 cent to 140.325 cents and August 0.775 cent higher at 142.950 cents.
Hogs again hit 6-month low
Downward-trending cash prices and Wednesday’s soft wholesale pork values pressed CME lean hog contracts to six-month lows for a second straight day, said traders.
Thinly traded May closed 1.275 cents per pound lower at 65.875 cents. Most-actively traded June ended 1.550 cents lower at 69.950 cents.
Near-term supplies remain plentiful as packers process a backlog of hogs resulting from plant closures over the Easter holiday, said traders and analysts.
They said ample seasonal hog numbers has periodically allowed grocers to buy pork at lower cost as the spring grilling season goes into high gear.
Wednesday morning’s average cash hog price in Iowa/Minnesota was at $55.93 per cwt, 98 cents lower than on Tuesday, the USDA said.
U.S. government data on Wednesday morning showed the average wholesale pork price down 36 cents per cwt from Tuesday to $75.12.