CHICAGO, Nov 18 (Reuters) – Chicago Mercantile Exchange live cattle futures closed higher for a second day in a row on Wednesday, helped by more short-covering as expectations improved regarding cash prices later this week, traders said.
Spot December finished at 130.975 cents per lb, up 2.950 cents, and February 2.550 cents higher at 133.125 cents.
Wednesday’s futures advances may have been driven by talk of better-than-anticipated prices for market-ready, or cash, cattle at smaller cattle auctions, said Vetterkind Cattle Brokerage president Troy Vetterkind.
Cash cattle sellers elsewhere in the U.S. Plains have not received bids from packers after pricing their animals up to $130 per cwt, said feedlot sources. Last week, cash cattle sold at $126 to $129.
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Negative packer margins and tepid wholesale beef demand work against cash prices. But wintry weather and fewer animals for sale, despite the Thanksgiving holiday-shortened workweek, might underpin cash values in some areas.
Wednesday morning’s wholesale choice beef price slipped 36 cents per cwt from Tuesday to $208.01. Select cuts rose 64 cents to $198.57, based on U.S. Department of Agriculture data.
The average beef packer margin for Wednesday was a negative $6.30 per head, compared with a negative $10.45 on Tuesday, as calculated by HedgersEdge.com.
Bullish investors cited winter-like weather in parts of the Plains that could disrupt cattle production while supporting cash and wholesale beef prices in the near term.
Buy stops and more live cattle futures buying lifted CME feeder for a second straight day. Spot November closed at 174.875 cents, up 1.400 cents.
CME lean hogs were strengthened by the morning’s bump in wholesale pork values, but pressured by weaker cash price expectations, traders said.
Spot December finished up 0.200 cent per lb to 54.375 cents, and February ended down 0.100 cent to 56.275 cents.
Wednesday morning’s wholesale pork price rose $1.24 per cwt from Tuesday to $73.27, following $5.38 higher pork belly costs the USDA said.
Cash hog prices in the Midwest on Wednesday morning were generally steady, according to regional hog dealers.
Some processors have inventories full heading into the holiday, but others still need hogs for Saturday’s 190,000-plus projected kill, a trader said.
Meanwhile, retailers are periodically buying pork at lower prices to advertise after the Thanksgiving holiday, he said.
