By Theopolis Waters
CHICAGO, April 21 (Reuters) – Chicago Mercantile Exchange live cattle notched a one-year high for a fourth consecutive session on Friday, bolstered by improved wholesale beef demand and futures’ discounts to this week’s cash prices, traders said.
Analysts viewed the U.S. Department of Agriculture’s monthly Cattle-On-Feed report, issued after the market closed, as mildly bearish for futures on Monday.
The report showed U.S. cattle ranchers in March placed 11.0 percent more cattle into feedlots than a year ago in a record high for the month.
“Some people are still focused on this strong wholesale beef market and exciting situation with the market hitting new highs,” said Allendale Inc. chief strategist Rich Nelson, explaining why traders might take Friday’s bearish report in stride.
Friday afternoon’s average wholesale beef price climbed $1.44 per cwt to $217.16 from Thursday.
Select cuts rose 32 cents to $203.89, the USDA said.
Packers this week paid $130 to $133 per cwt for cattle, as much as $5 higher than last week given good beef demand, tight cattle supplies and profitable packer margins.
Investors may expect steady-to-better cash prices next week as long as beef demand holds up, said traders and analysts.
On Monday USDA will issue the monthly cold storage report at 2 p.m. CDT that will include March total beef and pork inventories.
A few analysts, on average, projected last month’s total beef stocks at 491.8 million pounds and 546.1 million for pork.
CME feeder cattle April futures tracked the exchange’s feeder cattle index for April 20 at 138.05, but profit-taking pressured the May contract.
April feeder cattle ended 0.650 cent per pound higher at 138.550 cents.
Actively-traded May ended 0.500 cent lower at 139.250 cents.
HOGS AGAIN HIT NEW LOWS
CME May lean hogs slumped to a fresh contract low, and deferred contracts again racked up new monthly lows, pressured by their premiums to the exchange’s hog index for April 19 at 61.59 cents, said traders.
They also said futures prices may be over-valued based on current cash hog prices.
May closed 0.775 cent per pound lower at 63.025 cents, and posted a new contract low of 62.500 cents.
Most-actively traded June ended down 0.350 cent at 68.325 cents, its lowest since Oct.
Fallen futures reflect farmers being paid less for their animals as supplies grew seasonally and after packers took the Easter holiday off, said traders.