Chicago | Reuters — Chicago Mercantile Exchange live cattle futures posted significant gains on Friday, in anticipation of higher cash prices and short-covering before Monday’s Presidents Day holiday in the U.S., traders said.
News of Canada’s first case of bovine spongiform encephalopathy (BSE) since 2011 provided further support to CME live cattle contracts, they said.
Futures already were at a huge discount to recent cash prices and received an extra boost from the Canadian situation, even though no meat from the animal’s carcass had entered the food chain, said Lane Broadbent, vice president of KIS Futures Inc.
Bids for market-ready (cash) cattle in Kansas were at $161 per hundredweight (cwt) versus up to $165 asking prices, feedlot sources said. Last week, cash cattle in the U.S. Plains moved at $160 to $162.50/cwt.
Processors are expected to pay more for cattle at a time of seasonally tight supplies, even though their poor margins and lacklustre beef sales suggest otherwise.
Friday morning’s choice wholesale beef price dropped $1.01, to $238.09 per cwt, from Thursday (all figures US$). Select cuts sagged 82 cents, to $234.37, the U.S. Department of Agriculture said.
Some U.S. packing plants will be closed for the Presidents Day holiday. During last year’s holiday, packers processed about 86,000 head of cattle and 411,000 hogs, based on USDA data.
February closed 0.9 cent/lb. higher at 160 cents, and April ended up 2.1 cents at 153.225 cents.
Technical buying and live cattle market gains lifted CME’s thinly-traded feeder cattle contracts.
March closed 3.55 cents/lb. higher at 203.85 cents and April ended up 2.95 cents, to 203.25 cents.
Hogs rise again
CME lean hogs finished higher for a second straight session on pre-weekend short-covering and the morning’s wholesale pork price bounce, traders said.
February, which expired at noon CT, closed up 0.125 cent, to 62.075 cents/lb., while April ended 1.525 cents higher, at 66.025 cents.
Government data showed the morning’s wholesale pork price at $73.16/cwt, up $1.07 from Thursday.
Grocers are featuring more pork while faced with historically high beef prices, analysts and traders said.
Still, West Coast port delays and ample numbers of heavyweight hogs wore down cash prices, they said.
Cash hogs in the Midwest sold 50 cents to $1/cwt lower on Friday morning, according to regional hog dealers.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.Tagged cattle futures, CME, hog futures