Chicago | Reuters — Chicago Mercantile Exchange live cattle futures reached a two-month high for a second straight day on Thursday, buoyed by this week’s stronger-than-anticipated cash prices, traders said.
December live cattle closed up 0.025 cent/lb. to 108.225 cents, and February ended 0.3 cent higher at 108.8 cents (all figures US$).
This week, packers in the U.S. Plains paid up to $110/cwt for slaughter-ready, or cash, cattle that a week earlier brought mostly $105, said feedlot sources.
CME live cattle future’s recent upward momentum attracted fund investors, “plus the fact that packers just plain need cattle,” said Oak Investment Group President Joe Ocrant.
There were fewer cattle for sale than last week. And, sellers asked for more money for their animals based on higher cash prices at Wednesday’s Fed Cattle Exchange.
Investors attributed some of Thursday’s market rally to positioning before Friday’s U.S. Department of Agriculture monthly Cattle on Feed report.
On average, most analysts believe fewer animals were placed in feedlots last month than a year ago.
The threat of potential disruptions to livestock production due to wintry weather in parts of the upper Plains may have played a small role in Thursday’s market rally, said Ocrant.
Profit-taking after seven straight sessions of gains pulled CME feeder cattle from session highs.
November feeders, which expired at noon CT settled unchanged at 126.975 cents/lb. Most actively traded January ended 0.4 cent lower, at 124.925 cents.
Lower hog futures settlement
Thursday’s lower cash and wholesale pork prices undercut CME lean hog futures, said traders.
December closed 0.575 cent per pound lower at 47.45 cents, and February ended 0.3 cent/lb. lower at 54.225 cents.
The afternoon wholesale pork price slumped $1.90/cwt from Wednesday to $72.23, after ham prices tumbled more than $6, USDA said.
Thursday afternoon’s average cash hog price in Iowa/Minnesota slipped 22 cents/cwt from Wednesday to $40.84, USDA said.
Plant shutdowns over the Thanksgiving holiday will reduce the number of hogs packers need for processing, a trader said.
Supermarkets are close to having all the pork they need to feature for the upcoming holiday, he said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.Tagged closing markets, CME, Fed Cattle Exchange, feeder cattle, lean hogs, live cattle