Chicago Mercantile Exchange (CME) live cattle futures rose on Monday after recent wintry weather in the U.S. Plains trimmed cattle supplies and pushed up wholesale beef prices, traders and analysts said.
Investors also said another storm developing in the central and western Midwest could create more problems at feedyards where cattle are fattened for slaughter.
Snow coupled with warmer temperatures later in the week could turn feedlots muddy, making it difficult to sort and move cattle, said Oak Investment Group president Joe Ocrant.
"But the big news is that beef prices were on fire after retailers and other meat buyers were caught short of supplies after back-to-back storms last week," he said.
The wholesale price for choice beef on Monday climbed $2.86 per hundredweight (cwt) from Friday to $190.96; select cuts jumped $2.27 to $188.08, according to the U.S. Department of Agriculture (all figures US$).
Investors were waiting for feedlots to tally the number of cattle available for sale.
Cash-basis cattle last week sold at $127-$128/cwt, which was $3-$5 higher than the previous week, feedlot sources said.
April live cattle closed at 130.35 cents per pound, up 0.4 cent. June ended up 0.45 cent at 125.55 cents.
CME feeder cattle drew support from the higher live cattle market and lower corn prices.
March feeders settled 0.975 cent/lb. higher at 142.525 cents. April ended at 144.725 cents, up 0.575 cent.
Hogs slump on premiums
Hog futures closed lower due to their premiums to CME’s lean hog index at 78.87 cents, analysts and traders said.
April hogs ended at 80.3 cents/lb., 0.825 cent lower. June closed down 0.8 cent to 90.575 cents.
But packers could raise bids for cash hogs in the near term while padding inventories for this week’s slaughter, a trader said.
Investors are also watching wholesale pork prices for signs of an uptrend as supermarkets purchase hams to feature for the Easter holiday, he said.
He said higher wholesale pork values may also reflect increased demand as the spring thaw ushers in grilling in parts of the country.
USDA data showed the average price for hogs in the most-watched Iowa/Minnesota market on Monday at $76.87/cwt, $2.22 higher than Friday.
The wholesale price for pork on Monday averaged $81.67/cwt, up 62 cents from Friday, according to USDA.
– Theopolis Waters writes for Reuters from Chicago.