By Theopolis Waters
CHICAGO, May 21 (Reuters) – Chicago Mercantile Exchange live cattle closed higher on Thursday on short-covering and futures’ discounts to cash prices, traders said.
June closed up 1.025 cents per pound to 152.375 cents, and August was 1.175 cents higher at 150.900 cents.
This week, the bulk of market-ready, or cash, cattle in the U.S. Plains are fetching $159 to $161 per hundredweight (cwt), steady to $2 lower than last week, feedlots sources said.
Packers who shored up near-term inventories underpinned cash prices in parts of the Plains, while others needed fewer cattle due to Memorial Day holiday plant shutdowns, analysts and traders said.
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U.S. livestock: CME cattle futures hit new contract highs as supplies tighten
Chicago Mercantile Exchange live and feeder cattle futures rallied to fresh contract highs on Wednesday, as tight supplies and strong cash market prices continued to send future contracts surging, market analysts said.
Choice beef fell $2.76 to $262.22 per hundredweight
Some investors evened up positions before USDA’s monthly Cattle-On-Feed and cold storage reports that will be released at noon ET on Friday, rather than 3:00 p.m. ET due to Monday’s holiday.
With respect the Cattle-On-Feed report, most analysts polled by Reuters expected a year-over-year increase in the number of cattle that entered feedlots last month.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 475.7 mln lb., and pork stocks at 680.9 mln lb.
CME’s May feeder cattle contract, which expired at noon CDT, settled at 220.100 cents per lb., up 0.375 and near the exchange’s feeder cattle index for May 20 at 219.78 cents.
Live cattle futures buying pushed up remaining feeder cattle contracts.
August ended 1.025 cents higher at 217.725 cents and September up 0.950 cent to 216.825 cents.
HOG FUTURES FINISH HIGHER
CME lean hogs gained on short covering, partly due to the day’s wholesale pork price upswing, traders said.
June closed 1.225 cents per lb. higher at 83.775 cents, and July up 0.500 cent to 83.850 cents.
USDA data quoted the morning’s wholesale pork price at $87.43 per hundredweight, up $1.30 from Wednesday.
Retailers will closely watch weather, especially on the densely-populated U.S. East Coast, to determine meat clearance over the holiday weekend.
Many packers are thought to have enough hogs for post-holiday production, but there may be pockets where packers might compete for supplies.
“For next week I’m already having a hard time trying to find hogs for myself,” an Ohio hog dealer said.
The morning’s cash hog prices in the Midwest region were steady to $1 per cwt lower than on Wednesday, regional hog dealers said.
