Chicago | Reuters — Chicago Mercantile Exchange live cattle futures gained on Wednesday, helped by short-covering and bargain hunting after recent market losses, traders said.
But expectations of softer market-ready, or cash, cattle prices by Friday, and subsequent increased supplies, tempered market advances, traders said.
“Futures is an anticipatory market. It is already anticipating cash is going to go lower,” said Larry Hicks, president of CattleHedging.com.
On Tuesday, a small number of cash cattle in Texas fetched $125/cwt, down from last week’s trades of $130-$132 in the U.S. Plains, according to feedlot sources (all figures US$).
There are significantly more cattle for sale compared with last week as packers buy for the U.S. Memorial Day holiday-shortened workweek, traders and analysts said.
After falling four days in a row, they said the morning’s beef cutout values turned higher on last-minute retail buying ahead of the three-day holiday weekend, the unofficial start of the summer grilling season.
The choice beef price, or cutout, at $224.83/cwt early on Wednesday, rose $1.56 from Tuesday. Select cuts were up 35 cents, to $207.17, the U.S. Department of Agriculture said.
June live cattle closed up 0.15 cent/lb. at 118.15 cents, and August ended 0.225 cent higher at 113.4 cents.
CME feeder cattle contracts ended mostly higher on short-covering and modest live cattle market advances.
May futures, which will expire on Thursday, closed 0.525 cent/lb. lower at 145.475 cents.
Most-active August finished 0.575 cent/lb. higher at 142.675 cents, and September ended up 0.775 cent to 141.550 cents.
Higher hog market close
Short-covering and speculative buying in anticipation of less supplies and increased pork demand after Memorial Day lifted CME lean hogs, traders said.
Spot June closed 0.5 cent/lb. higher at 80.175 cents, and July ended up 0.45 cent to 79.825 cents.
“Packers right now are flush with hogs. But farmers will take advantage of whatever dry weather they get to finish planting crops instead of moving hogs,” a Midwest hog dealer said.
USDA data on Wednesday morning showed the average cash hog price in Iowa/Minnesota fell $1.71/cwt from Tuesday to $75.19 in light volume.
The morning session’s wholesale pork price uptick may reflect retailers topping off upcoming holiday meat orders while possibly looking ahead to Father’s Day in mid-June.
Wednesday morning’s wholesale pork price was up $1.08 from Tuesday to $84.31/cwt, according to USDA.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.