U.S. livestock: Equities spike drives CME live cattle limit-up

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures climbed to their three cents/lb. daily price limit on Thursday following a turnaround in crude oil prices that helped pare recent deep U.S. stock market losses.

February and April live cattle closed at 130.25 and 131.175 cents, respectively. Live cattle’s trading limit will be expanded to 4.5 cents on Friday.

The choppiness in live cattle futures, and other markets, is led by day-to-day “emotional” volatility tied to crude oil and equities, said AgriVisor Services analyst Dale Durchholz.

Meanwhile, cattle market participants expect cash cattle to trade around $130/cwt by Friday based on $127-$128/cwt packer bids versus $134 asking prices from sellers.

Last week, cash cattle in the U.S. Plains brought $132-$134/cwt.

Processors may curb cash spending to improve their margins while watching wholesale beef prices teeter on resuming their seasonal slide.

Thursday morning’s wholesale beef price dropped $1.14/cwt from Wednesday, to $228.81. Select cuts rose 90 cents, to $225.04, the U.S. Department of Agriculture said.

Market participants await USDA’s monthly Cattle-On-Feed report on Friday.

The government will simultaneously issue the monthly cold storage survey that will include December beef and pork inventories.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 527.7 million lbs., and pork at 568 million lbs.

Live cattle future’s upswing pulled CME feeder cattle contracts higher. March feeders finished up the 4.5-cent/lb. price limit that will be expanded to 6.75 cents on Friday.

January closed at 158.675 cents/lb., 3.675 cents higher. March ended limit-up at 154.225 cents.

Hog futures end higher

Firm cash prices and CME live cattle futures buying supported the exchange’s lean hog market, traders said.

Spot February finished up 1.025 cents/lb., to 63.75 cents, and April ended 1.95 cents higher at 69.025 cents.

Cash hogs in the Midwest on Thursday morning traded as much as $1/cwt higher amid seasonally tight supplies and highly profitable packer margins, regional hog dealers said.

“In general, there are still a lot of hogs out there. But farmers for the most part are current,” or on schedule sending animals to market, an Iowa dealer said.

Technical buying developed, especially after the May contract rolled through the 200-day moving average of 75.01 cents.

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