Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Thursday settled higher for the first time in six sessions, helped by short-covering before the Easter holiday weekend, traders said.
April live cattle ended 0.4 cent/lb. higher at 135.85, and June finished up 0.275 cent at 125.375 (all figures US$).
The April contract led late-session advances, supported by its discount to preliminary prices for market-ready, or cash, cattle in Texas at $136/cwt. That was $3 lower than last week, traders and feedlot sources said.
Investors await the bulk of this week’s cash sales, with bids elsewhere in Texas and the U.S. Plains at $135-$136/cwt against asking prices of $140-$141.
The cash market last week peaked seasonally and could grind lower in the near term, said Archer Financial Services broker Dennis Smith.
Deteriorating packer margins, soft wholesale beef demand and uneasiness about cash prices next week, as packers buy for the Easter Monday holiday-shortened workweek, capped Thursday’s gains, traders and analysts said.
Some cattle may change hands by late Thursday because a few plants will be closed on Good Friday. But most processors may resist buying cattle until late on Friday because most plants will be closed on Easter Monday.
HedgersEdge.com estimated that the average beef packer margin on Thursday was a negative $16.55 per head, down from a negative $2.20 on Wednesday and a positive $50.70 a week ago.
The morning’s wholesale choice beef price fell 65 cents/cwt from Wednesday to $225.53. Select cuts were 71 cents higher at $218.86, the U.S. Department of Agriculture said.
CME feeder cattle’s spot March contract, which expired at noon CT, ended down 0.425 cent/lb. to 160.975 cents.
Both April, the new lead month, and May finished up 0.275 cent at 155.825 and 155.025 cents, respectively, on late-day live cattle futures buying.
Hog futures slump
The morning’s wholesale pork price drop and jitters before Friday’s USDA quarterly hog report pulled CME lean hogs lower, traders said.
Analysts, on average, expected a marginal increase in the U.S. hog herd during the December-through-February quarter versus a year ago.
April closed down 0.05 cent/lb. at 69.625 cents, May ended 1.85 cents lower at 76.65 cents and June finished 1.65 cents/lb. lower at 81.125 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.Tagged cattle futures, closing markets, CME, feeder cattle, hog futures, lean hogs, live cattle