By Theopolis Waters
CHICAGO, Feb 13 (Reuters) – Chicago Mercantile Exchange live cattle futures posted significant gains on Friday, in anticipation of higher cash prices and short-covering before Monday’s Presidents Day holiday in the U.S., traders said.
News of Canada’s first case of BSE since 2011 provided further support to CME live cattle contracts, they said.
Futures already were at a huge discount to recent cash prices and received an extra boost from the Canadian situation, even though no meat had entered the food chain, said Lane Broadbent, vice president of KIS Futures Inc.
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Bids for market-ready or cash cattle in Kansas were at US$161 per hundredweight (cwt) versus up to $165 asking prices, feedlot sources said. Last week, cash cattle in the U.S. Plains moved at $160 to $162.50 per cwt.
Processors are expected to pay more for cattle at a time of seasonally tight supplies, even though their poor margins and lackluster beef sales suggest otherwise.
Friday morning’s Choice wholesale beef price dropped $1.01 to $238.09 per cwt. from Thursday. Select cuts sagged 82 cents to $234.37, the U.S. Department of Agriculture said.
Some meat packing plants will be closed for Monday’s Presidents Day holiday. During last year’s holiday, packers processed about 86,000 head of cattle and 411,000 hogs, based on USDA data.
The February contract closed 0.900 cent per pound higher at 160 cents and April ended up 2.1 cents at 153.225 cents.
Technical buying and live cattle market gains lifted CME’s thinly-traded feeder cattle contracts.
March closed 3.550 cents per lb. higher at 203.850 cents and April ended up 2.950 cents to 203.250 cents.
HOGS RISE AGAIN
CME lean hogs finished higher for a second straight session on pre-weekend short-covering and the morning’s wholesale pork price bounce, traders said.
February, which expired at noon CST, closed up 0.125 cent to 62.075 cents per lb., while April ended 1.525 cents higher at 66.025 cents.
Government data showed the morning’s wholesale pork price at $73.16 per cwt., up $1.07 from Thursday.
Grocers are featuring more pork while faced with historically high beef prices, analysts and traders said.
Still, West Coast port delays and ample numbers of heavyweight hogs wore down cash prices, they said.
Cash hogs in the Midwest sold 50 cents to $1 per cwt. lower on Friday morning, according to regional hog dealers.
