By Theopolis Waters
CHICAGO, July 15 (Reuters) – Chicago Mercantile Exchange live cattle on Tuesday erased Monday’s losses, supported by a wholesale beef price rebound that ignited short-covering, traders said.
Tuesday morning’s wholesale price for Choice beef gained 67 cents per hundredweight (cwt) from Monday to $251.81 per cwt. Select beef hit an all-time high of $244.95, topping Friday’s $244.84 record, according to the U.S. Department of Agriculture.
“I think it’s more of an issue of we not having enough supply than beef demand being inordinately strong,” said Sterling Marketing Inc. President John Nalivka.
Read Also
Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Unusually cool summer weather in Midwest may have underpinned demand for beef at a time when normally hot weather reduces consumption of heavier meals.
Futures’ price discount to last week’s returns for cash cattle provided more market support.
Investors expect a steady or weak cash cattle trade this week given more animals for sale and anticipation of a delayed seasonal increase in cattle supplies.
Cash prices may feel pressure as packers cut slaughter rates to conserve margins and offset overall tight cattle supplies.
Cash cattle bids in Texas and Kansas surfaced at $152 per cwt. with no response from sellers, said feedlot sources. Last week, cash cattle in the U.S. Plains moved at $155 to $156 per cwt.
August live cattle finished 0.775 cent per pound higher at 148.575 cents, and October up 1.000 cent to 151.850 cents.
CME feeder cattle closed higher with help from short-covering, live cattle futures’ turnaround and lower corn prices.
August closed up 0.850 cent per lb. to 211.525 cents, and September 0.700 cent higher at 211.825.
HOG FUTURES UP WITH DISCOUNTS
CME hogs finished moderately higher with the July contract settling up 0.500 cent per lb. at 133.875. It expired at noon CDT nearly in line with the exchange’s hog index at 132.78 cents.
August and October futures’ discounts to CME’s hog index attracted some buyers.
August ended up 0.375 cent to 130.725 cents, and October at 115.950 cents up 0.225.
Uncertainty about cash prices in the near term, based on heavy carcass weight that are helping to mitigate tight supplies, limited market advances, said traders and analysts.
Tuesday morning’s average hog price in the western Midwest fell $1.69 per cwt. from Monday to $130.99, USDA said.
