CHICAGO, April 25 (Reuters) – Chicago Mercantile Exchange live cattle futures closed higher on Monday, helped by short covering and futures’ discounts to last week’s cash prices, traders said.
April live cattle closed 0.825 cent per lb higher at 125.550 cents, and June ended 1.950 cents per lb higher at 116.600 cents.
Last week, market-ready, or cash, cattle in the U.S. Plains fetched $125 to $128 per cwt, compared with $133 to $136 the week before, said feedlot sources.
Friday’s mildly bullish U.S. Department of Agriculture monthly cattle and cold storage reports encouraged futures buyers.
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USDA’s monthly Cattle-on-Feed report last Friday showed fewer cattle placed in feedlots in March than a year ago.
“The Cattle-On-Feed report simply was not as bearish as so many people were expecting. And there wasn’t any reason to beat them (futures) up,” said independent livestock futures trader Dan Norcini.
Friday’s government monthly cold storage report showed last month’s total beef inventory at 466.9 million lbs, down 5 percent from February and down 3 percent from a year ago.
April feeder cattle, which will expire on Thursday, closed 1.925 cents per lb lower at 146.025 cents. May ended up 0.800 cent at 143.250 cents, and August ended 1.150 cents higher at 143.250 cents.
Cash feeder cattle prices that fell as much as $4 per cwt weighed on CME April feeder cattle futures.
Remaining feeder cattle contracts followed CME’s live cattle market higher.
CME lean hog futures’ premiums to the exchange’s hog index for April 21 at 67.68 cents pressured contracts, traders said.
Thinly traded May ended 0.775 cent per lb lower at 74.925 cents, and most-active June finished down 0.375 cent at 78.450 cents.
Investors eyed the morning’s cash price in Iowa/Minnesota at $65.72 per cwt, $1.59 lower than on Friday in extremely light volume, based on the government’s direct hog market report.
Regional hog dealers quoted cash hog prices in the Midwest Monday morning at steady to up 50 cents per cwt from Friday.
“We’ll keep grinding about 50 cents higher in the near term because it’s that time of year when the numbers (supplies) tighten up,” a Midwest hog dealer said.
Dealers and analysts said a stretch of warm, dry weather is needed for barbecuing in order to drive cutout prices higher.
Monday morning’s wholesale pork, or cutout, price at $80.14 per cwt was up 38 cents from Friday, according to USDA data.
