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U.S. livestock: CME live cattle soar limit up

Fund buying boosts CME lean hogs

cattle grazing
(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle contracts on Wednesday posted new highs, and nearby months hit their three-cent daily price limit, sparked by brisk beef demand and stronger-than-anticipated cash prices, traders said.

June settled at 130.05 cents and August 123.8 — limit up and fresh highs for both contracts (all figures US$). Thursday’s live cattle trading limit will be expanded to 4.5 cents.

Cash cattle in the U.S. Plains traded from $145 to $147/cwt on Wednesday, up from $134 to $136/cwt last week, analysts and feedlot sources said.

A small number of animals at Wednesday morning’s Fed Cattle Exchange, on average, brought $140.15/cwt compared with last week’s $131.68 average high.

Wednesday afternoon’s average wholesale beef price jumped $3.14/cwt to $232.59. Select cuts climbed $1.61, to $214.89, the U.S. Department of Agriculture (USDA) said.

“Packers were crawling all over themselves to pay up for these cattle,” said Jim Clarkson, a broker with A+A Trading Inc.

Some processors may have been caught short on inventory after selling product in advance to retailers that bought meat for spring grilling, analysts and traders said.

Cattle weights declined in recent weeks, they added, which reduced the amount of beef available to grocers.

Live cattle futures buying boosted CME feeder cattle to their second straight 13-month top and August up by its 4.5-cent limit.

May feeder cattle ended 3.675 cents/lb. higher at 153.3 cents while August closed at 160.1 cents. Feeder cattle’s limit will be expanded to 6.75 cents on Thursday.

Hogs settle higher

Fund buying, along with strong cash and wholesale pork prices, drove up CME lean hogs, traders said.

May closed one cent per pound higher at 67.95 cents, and above the 20-day moving average of 66.942 cents. Most actively traded June ended 1.4 cents higher at 75.55 cents and surpassed the 200-day moving average of 74.633 cents.

Wednesday afternoon’s average cash hog price in Iowa/Minnesota was at $58.92/cwt, $2.78 higher than on Tuesday, the USDA said.

USDA quoted Wednesday afternoon’s average wholesale pork price up 42 cents/cwt from Tuesday to $76.31, with higher prices for all categories listed except ham.

Processors are compelled to offer farmers more money while charging retailers more for pork as hog supplies decline seasonally, traders said.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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