Chicago | Reuters — U.S. live cattle futures advanced on Thursday, lifted by firm beef and cash cattle markets and as investors took positions ahead of a monthly supply report due on Friday, traders said.
Some feedlot cattle in the southern U.S. Plains traded at $128/cwt on Thursday, about steady with sales last week, and some sellers are holding out for even higher prices (all figures US$).
Snow and frigid temperatures in parts of the Plains are also slowing cattle movement and may slow weight gains in some animals, fuelling further cash market optimism.
“The beef market’s been strong and feedlots still seem to have the upper hand in the cash market,” said Doug Houghton, analyst with Brock Associates.
“And with the Cattle on Feed report tomorrow, it seems like everybody expects to see light placements and the cattle on feed number drift close to a year ago,” he said, referring to Friday’s monthly U.S. Department of Agriculture report.
Analysts polled ahead of the report expect on-feed supplies as of Feb. 1 at 100.2 per cent of a year ago, while placements were seen down 6.5 per cent and marketings were expected to be up 2.4 per cent.
Wholesale beef prices rose for a sixth straight day on Thursday as USDA quoted the choice cutout value at $226.04/cwt, up $1.11, and the select cutout at $218.54, up 17 cents.
Chicago Mercantile Exchange April live cattle ended up 0.05 cent at 128.95 cents/lb. and June was up 0.725 at 120.35 cents.
Feeder cattle futures rose steeply in a technical bounce, also drawing strength from higher live cattle and sharply lower corn prices.
April feeder cattle ended up 2.35 cents at 146 cents/lb.
Lean hog futures were mixed, with the nearby contract posting the strongest gains on rising pork prices and stronger-than-expected pork export sales. Ample hog supplies, however, kept a lid on prices.
April lean hogs rose 0.65 cent, to 57.725 cents/lb. while June hogs fell 0.225, to 75.525 cents.
USDA quoted the latest pork carcass cutout value up $1.19/cwt at $64.25, the fourth gain in five days.
Earlier on Thursday, the agency said last week’s pork export sales totaled 24,436 tonnes, 23 per cent higher than the same week a year ago.
Traders remain focused on U.S.-China trade talks. Markets expect Beijing to buy large volumes of U.S. goods as part of a trade deal, possibly including pork.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.