CHICAGO, June 29 (Reuters) – Chicago Mercantile Exchange live cattle closed higher on Monday, supported by short-covering before the final trading session of the quarter on Tuesday, analysts said.
June, which will also expire on Tuesday, finished 1.275 cents per lb higher at 149.675 cents, and August up 1.350 cents to 149.875 cents.
“I think short-covering really is the dominant part of the mix,” said AgriVisor Services senior market analyst Dale Durchholz.
Some investors were encouraged by fewer cattle for sale this week and late-Friday’s cash cattle prices that were higher than earlier in the week.
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Chicago Mercantile Exchange live cattle and feeder cattle futures set record highs on Wednesday as cash prices stayed strong, along with consumers’ demand for beef, brokers said.
A week ago, market-ready, or cash, cattle in the U.S. Plains fetched $147 to $149 per cwt, feedlot sources said.
Still, investors remain cautious about beef demand that typically decline as summer temperatures rise.
Furthermore, some shoppers may consider switching from pricy beef to less-costly pork and chicken, traders said.
Monday morning’s wholesale choice beef price dropped 52 cents per cwt from Friday to $252.60. Select cuts rose $1.19 cents to $249.34, the USDA said.
Short-covering and live cattle futures buying drove up CME feeder cattle contracts.
August closed 1.825 cents per lb higher at 219.075 cents per lb.
HOGS MIXED AFTER USDA REPORT
In a trading strategy known as bear spreading, CME lean hog investors sold nearby contracts and simultaneously bought deferred months following Friday’s USDA quarterly hog report, traders said.
Friday’s report showed further hog herd expansion in the March-May quarter, which was tempered by weaker hog prices at that time.
July hogs closed 1.200 cent per lb lower at 74.250 cents, and August down 1.050 cents to 71.775 cents. October ended 1.325 cents higher at 64.650 cents, and December up 1.825 cents to 63.050 cents.
The July contract was further pressured by plentiful supplies ahead of packing plant closings for at least one day during the Fourth of July holiday.
But, some packers may need hogs for the first full kill week after the holiday, which might underpin cash in the near term, traders said.
Retailers are buying pork sparingly until they evaluate how much cleared meat cases over the three-day holiday weekend, they said.
Cash hogs prices in the Midwest on Monday morning were generally inline with Friday’s sales, regional hog dealers said.
USDA data quoted Monday morning’s wholesale pork price at $82.21 per cwt, up 48 cents from Friday.
