May 21 (Reuters) – Chicago Mercantile Exchange live cattle futures turned moderately higher on Wednesday in choppy action, supported by short-covering in response to improved wholesale beef demand, traders said.
* Reduced kills and grocers gearing up for spring grilling likely pushed up wholesale beef values, traders and analysts said.
* Futures’ discount to last week’s cash cattle prices provided more support.
* Uneasiness about cash cattle prices moving forward limited market advances.
* At 8:45 a.m. CDT (1345 GMT), June was up 0.150 cent per lb at 137.550 cents, and August gained 0.100 cent to 137.925 cents.
* Investors await this week’s prices for slaughter-ready or cash cattle that might draw pressure as packers plan to close plants during the Memorial Day holiday.
* Processors are bracing for a long-awaited seasonal increase in supplies, which could drag down cash returns.
* Last week, cash cattle in Texas and Kansas, on average, moved at $145 per hundredweight (cwt), and $148 in Nebraska.
* FEEDER CATTLE – May, which will expire on May 23, was at 189.350 cents, up 0.300 cent per lb. August was at 196.625 cents, up 0.700 cent.
* CME feeder cattle set a new high, driven by short-covering and periodic live cattle futures firmness.
* LEAN HOGS – June was 0.925 cents higher at 119.525 cents, and July climbed 1.000 cents at 126.175 cents.
* CME hog futures drew support from late Tuesday’s sharply higher prices for market-ready, or cash, hogs, and wholesale pork values, traders said.
* Packers are buying hogs to round out this week’s slaughter, a trader said. Grocers are stocking up on pork to feature after Monday’s holiday, he added.
* Futures’ premium to CME’s hog index at 112.07 cents slowed down advances.
* USDA data on Wednesday showed hog weights in Iowa/Minnesota for the week ended last Saturday averaged 287.5 lbs, which matched the record-high for the week ending April 26. It was also up 0.9 lb from the prior week and up 10.9 lbs from a year earlier.
* Heavier hogs will, in the short-term, continue to partly offset production losses from the Porcine Epidemic Diarrhea virus, an analyst said. (Reporting by Theopolis Waters in Chicago Editing by W Simon)