CHICAGO, Feb 22 (Reuters) – Chicago Mercantile Exchange live cattle contracts settled higher on Monday, buoyed by the morning’s wholesale beef price turnaround, traders said.
Buy stops and fund buying contributed to CME live cattle futures advances, they said.
February closed 1.050 cents per lb higher at 136.425. April ended at 134.625 cents, up 0.675 cent and above the 100-day moving average of 134.35 cents.
The morning’s wholesale choice beef price jumped $1.55 per cwt from Friday to $213.21. Select cuts rose 77 cents to 208.92, the U.S. Department of Agriculture said.
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“I’d like to think the cutout has reached a seasonal bottom, but I still need at least a day or so to say we’re in an uptrend,” a trader said.
He said it was difficult to tell whether retailers are purchasing more beef to feature later, or were forced to do so after packers recently cut kills to improve their margins.
Several commodities received an extra boost from the steep climb in the U.S. stock market, fueled by the surge in crude oil prices.
Investors await the sale of market-ready, or cash, cattle later this week. Packers last week paid $134 per cwt for supplies, which matched cash prices the week before.
USDA will issue the monthly cold storage report on Tuesday that will include January beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 516.1 million lbs, and pork at 608.1 million lbs.
Profit-taking and sell stops weakened CME feeder cattle futures. March closed 0.700 cent per lb lower at 155.125.
Short-covering and the wholesale pork price upswing lifted CME lean hogs, traders said.
April closed up 0.350 cent per lb to 69.250 cents, and May finished 0.775 cent higher at 76.025 cents.
The morning’s wholesale pork price jumped $1.29 per cwt from Friday at $75.92, the USDA said.
Supermarkets bought pork in “fits and spurts” while gauging product movement during Lent, a trader said.
He said packers are trying to balance their need for supplies that are tight in some areas while plentiful elsewhere.
Cash hog prices in the Midwest Monday morning traded mostly steady, said regional hog dealers.
