Chicago | Reuters — Chicago Mercantile Exchange live cattle finished higher on Monday, buoyed by speculation that cash and wholesale beef prices may bottom out soon, traders said.
June closed up 0.65 cent per pound to 153.475 cents, and August 1.025 cent higher at 151.6 cents (all figures US$).
Monday morning’s wholesale choice beef (cutout) price dipped nine cents per hundredweight (cwt) from Friday, to $244.56. Select cuts fell $1.58, to $235.99, the U.S. Department of Agriculture said.
Last week, a small number of market-ready (cash) cattle in Kansas and Texas sold at $155/cwt, down $5 from the previous week, according to USDA.
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Cash cattle in Nebraska a week ago fetched $155 to $156, $4 to $5 lower than the week before, based on government data.
Processors reduced plant hours to shore up their sagging margins and improve cutout values, traders and analysts said.
But nearly 40,000 more cattle for sale this week may prove challenging for near-term cash prices, they said.
Beef packer margins for Monday sank to their lowest level of the year at a negative $102.10 per head, well below a negative $80.70 for Jan. 7, as calculated by HedgersEdge.com.
In a trading strategy known as bear spreading, traders bought August and simultaneously sold June in advance of its expiration on June 30.
The spreads lifted August beyond its respective 20-day and 10-day moving averages of 150.92 cents and 151.46 cents, igniting fund buying.
Technical buying and CME live cattle market gains drove up the exchange’s feeder cattle contracts.
August ended 0.95 cent/lb. higher at 222.85 cents.
Hogs dip ahead of June expiration
CME lean hogs closed weaker, partly on June selling before it expires on Friday, traders said.
Near-term cash and wholesale pork price unease pressured nearby contracts, they said.
June closed down 0.125 cent/lb. to 81.55 cents, July 0.15 cent lower at 80.975 cents.
Cash hogs in the Midwest on Monday morning sold steady to down 50 cents/cwt from Friday, regional hog dealers said.
The government reported the morning’s wholesale pork price at $85.65/cwt, up nine cents from Friday.
“You’re seeing some firmness in the pork market, which is not unusual for this time of year,” said David Maloni, chief analyst with the American Restaurant Association.
While packers have a enough hogs into Wednesday, others are booking supplies for the rest of the week, a trader said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
