By Theopolis Waters
CHICAGO, Feb 3 (Reuters) – Chicago Mercantile Exchange live cattle futures settled higher after Tuesday’s choppy session, supported by the wholesale beef price upswing that trumped initial selling, traders said.
February closed 0.550 cent per pound higher at 153.750 cents, and April up 0.975 cent to 150.575 cents.
Tuesday morning’s Choice wholesale beef price rose $1.46 per hundredweight (cwt) from Monday to $244.07. Select jumped $2.28 to $237.88, the U.S. Department of Agriculture said.
Recent wintry weather in the U.S. Plains decreased the number of cattle available to packers, which forced retailers to compete for beef, analsyts and traders said.
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Wholesale beef prices may have bottomed out, but more than one day of gains are needed before reaching that conclusion, a trader said.
Ongoing U.S. West Coast port congestion, and sporadic snow storms across the eastern United States, curbed meat sales, he said.
Fund buying developed after February and April returned above the 10-day moving average of 152.93 cents and 150.60, respectively.
Futures’ discounts to last week’s market-ready or cash prices stirred more buying.
Investors look for packers to spend steady or less money for slaughter-ready or cash cattle this week given their fading margins, lukewarm beef demand and more animals for sale.
Last week, cash cattle in the U.S. Plains moved at mostly $158 to $160.50 per hundredweight (cwt).
After closing limit down Monday, CME feeder cattle again closed lower, pressured by sell stops and sharply higher corn prices.
March closed 1.200 cents per lb. lower at 199.500 cents per lb, and April down one cent to 199.900 cents.
FEB HOGS FIRM, OTHERS WEAK
CME’s February lean hogs contract finished higher on bull spreads that consisted of investors who bought it and simultaneously sold back months.
February closed 0.875 cent per lb. higher at 67.200 cents, April down 0.050 cent to 70.875 cents and May 0.350 cent weaker to 79.000 cents.
February’s discount to cash prices encouraged buyers, even though many packers are snug on near-term inventories, traders and analysts said.
Government data on Tuesday showed packers processed 433,000 hogs, 16,000 more than last week.
Packers will resist paying more for hogs until they can sell the meat at wholesale, a trader said.
Tuesday morning’s average cash hog price in Iowa/Minnesota was down $1.30 per cwt. from Monday to $64.37, the USDA said.
Separate government data showed the morning’s wholesale pork price was at $76.49 per cwt, down $1.99 from Monday.
