CHICAGO (Reuters) — Chicago Mercantile Exchange live cattle futures closed higher on Wednesday following a snapback in wholesale beef prices, traders said.
December closed up 0.500 cent per lb at US167.750 cents, and February 1.175 cents higher at 169.575 cents.
The morning’s choice wholesale beef price rose $1.70 per hundredweight (cwt) from Tuesday to $251.67. Select was up 43 cents at $238.86, the U.S. Department of Agriculture said.
Packer cutbacks to recoup lost margins, and possible transportation disruptions from wintry weather in the Midwest, reduced beef supplies to retailers, an analyst said.
Read Also
Alberta Crop Report: Rains in the south, dryness in the north
Rain fell onto the southern half of Alberta last week, while hot and dry conditions persisted in the northern half, according to the province’s crop report released on July 18.
Short-bought processors may try to schedule supplies ahead of time to beat forecasts for much colder weather next week. But poor margins might curb cash cattle spending.
Last week, market-ready, or cash, cattle in the U.S. Plains sold at mostly $167 per cwt.
Funds trading CME live cattle and hog markets periodically sold December long positions and mostly bought February in a procedure known as the “roll” by followers of the Standard & Poor’s Goldman Sachs Commodity Index.
Wednesday was the fourth of five days for the S&PGSCI roll process.
CME feeder cattle followed the higher live cattle market.
November closed up 0.500 cent per lb at 239.350 cents, and January was at 233.375 cents, 0.725 cent higher.
CME lean hogs gained with wholesale pork values and in anticipation of higher cash prices, traders said.
December closed 0.775 cent per lb higher at 90.675 cents, and February up 1.350 cent per lb at 90.800 cents.
Hogs in the Midwest traded steady, regional dealers said.
Wednesday morning’s wholesale pork price was up 36 cents per cwt from Tuesday to $95.76.
Packers are buying hogs to top off this week’s production, including what is expected to be a big weekend slaughter to make up for Tuesday’s Veterans Day holiday downtime.
Less pork was available due to Tuesday’s holiday and delayed hog deliveries as parts of the Midwest plowed recently snow-covered roads.
Speculators bought deep deferred months in the belief that the deadly pig virus on hog farms will again flare up and reduce production beginning this spring.
