CHICAGO, March 1 (Reuters) – Chicago Mercantile Exchange live cattle futures gained slightly on Tuesday in anticipation of steady-to-higher prices for market-ready, or cash, cattle possibly before Friday, traders said.
April closed 0.125 cent per lb higher at 137.100 cents, and June ended up 0.175 cent to 126.350.
Cash bids surfaced in Texas and Nebraska at $136 per cwt against asking prices of $140, said feedlot sources. Last week, cash cattle moved at $133 to $137.
“Packers really must be desperate for cattle after bidding $136 for them so early in the week,” a trader said.
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Expectations of tighter cattle supplies in the coming weeks, and increased post-Easter holiday spring grilling demand, contributed to bullish cash price expectations.
Futures made headway despite slumping packer profits and mixed, rather than higher, wholesale beef values.
The morning’s wholesale choice beef price climbed 61 cents per cwt from Monday to $217.77. Select cuts slipped 12 cents to $212.72, the U.S. Department of Agriculture said.
Tuesday’s average beef packer margin was a negative $61.25 per head, down from a negative $39.55 on Monday and a negative $41.10 last week, as calculated by HedgersEdge.com.
Profit-taking and sell stops sent CME feeder cattle contracts lower. March closed down 0.100 cent per lb to 158.050 cents, and April ended 1.125 cents per lb lower at 157.950.
CME lean hogs drew strength in quiet activity from short-covering, buy stops and modest live cattle futures advances, traders said.
April closed 0.425 cent per lb higher at 70.400 cents, and May finished up 0.250 cent per lb to 76.850.
Some hog futures traders turned to live cattle contracts for inspiration because of the lack of clear fundamental hog market direction.
Recent CME live cattle futures and wholesale beef prices have held up reasonably well, which may have attracted bullish lean hog futures investors, said AgFutures Managed Investment hog futures trader Tom Cawthorne.
Cash hogs in the Midwest on Tuesday morning sold mostly steady to 50 cents per cwt lower amid ample supplies, said regional hog dealers.
The morning wholesale pork price on Tuesday was up 2 cents per cwt from Monday to $74.98, based on USDA data.
