By Theopolis Waters
CHICAGO, May 19 (Reuters) – Chicago Mercantile Exchange live cattle futures offset recent losses and finished higher on Tuesday, driven by short-covering following the day’s Choice wholesale beef price surge to an all-time high, traders said.
June closed up 0.400 cent per pound to 151.975 cents, and August was 0.575 cent higher at 150.600 cents.
Tuesday morning’s Choice wholesale beef price jumped $3.85 per hundredweight (cwt) from Monday to $266.77, topping the May 14 record of $264.74. Select cuts rose $1.26 to $251.68, the U.S. Department of Agriculture said.
A few retailers topped off Memorial Day and Father’s Day inventories with packers charging them more for product to boost their margins, traders and analysts said.
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U.S. livestock: Cattle hit fresh highs, hogs inch upward
Chicago cattle futures hit fresh highs on Monday while hogs made small gains.
Futures drew more support from their discounts to last week’s cash prices.
On Tuesday, market-ready, or cash, cattle bids in Kansas surfaced at $157 per cwt. with no response from packers, industry sources said. Last week, cash cattle in the U.S. Plains sold at $160 to $161.
Investors expect packers to spend the same or less than last week for cattle due to more animals for sale and plant closures during the Memorial Day holiday.
CME feeder cattle drew support from lower corn prices, live cattle market buying and steady to $4 higher cash feeder cattle prices.
The May contract, which will expire on Thursday, closed up 0.375 cent per lb. to 219.350 cents, and August 0.425 cent higher at 217.150 cents.
CASH WOES WEAKEN HOG FUTURES
CME lean hogs closed weaker in anticipation of lower cash prices, with packing plants needing less inventory ahead of Monday’s holiday, traders said.
June closed down 0.250 cent to 82.150 cents, and July 0.550 cent lower at 82.175 cents.
Cash hogs in the Midwest Tuesday morning traded steady to $1 per cwt lower than on Monday, regional hog dealers said.
Packers booked enough hogs at lower prices for the rest of the week while hiking costs for pork at wholesale, which returned their margins to the black.
Tuesday’s pork packer margins were at a positive 60 cents per head, compared with a negative $3.05 on Monday, according to HedgersEdge.com.
Separate government data quoted the morning’s wholesale pork price at $86.21 per cwt, $1.82 higher than on Monday.
U.S. House of Representatives agriculture committee chair Michael Conaway said on Tuesday he expects an early June vote on legislation to repeal U.S. meat labeling laws to avoid costly retaliation from Canada and Mexico.
Canada and Mexico began preparing retaliatory steps against U.S. goods on Monday after a World Trade Organization decision. The group said U.S. laws that require retailers to label meat with the country where the animal was born, raised and slaughtered discriminate against imported livestock.
“I am hopeful that a big vote in the House in early June will help the Senate,” Conaway told reporters.
