CHICAGO, Nov 8 (Reuters) – Chicago Mercantile Exchange live cattle futures rallied on Tuesday as strength from bargain buying and short-covering ended the market’s four-session slide, said traders.
They said futures garnered more support from fund buying after contracts broke through technical resistance levels.
Most actively traded December live cattle closed 0.950 cent per pound higher at 102.600 cents, and above the 20-day moving average of 101.81 cents.
Market participants may be anticipating roughly $104 per cwt cash prices by Friday, said CHS Hedging analyst Steve Wagner.
He said healthy packer profits, and likely retail featuring of beef as an alternative to ham and turkey over the winter holidays, are supportive cash price factors.
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However, packers might resist spending more for supplies based on plentiful numbers of heavier cattle and 14,000 more of them for sale than last week.
Investors await the sale of around 13,000 cattle at Wednesday morning’s Fed Cattle Exchange. Animals last week there sold for as much as $106 per cwt.
Some cattle and hog packing plants will be closed on Friday for the Veterans Day holiday. Last year on the holiday packers processed 103,000 cattle and 403,000 hogs, according to USDA estimates.
November feeders finished up 0.325 cent per lb to 124.400 cents. Most actively-traded January ended 2.975 cents higher at 119.225 cents.
Short-covering, technical buying and live cattle futures’ turnaround boosted CME feeder cattle contracts.
CME lean hog futures investors sold the December contract and simultaneously bought deferred months, led by Tuesday morning’s weaker market fundamentals amid ample supplies, said traders.
They said speculators also purchased back months with the view that farmers might not feed as many hogs if corn prices continue to rise.
December lean hogs closed down 0.125 cent per lb to 46.975 cents. February settled 0.525 cent higher at 54.500 cents and April 0.575 cent higher at 61.775
cents.
The morning wholesale pork price on Tuesday was down 23 cents per cwt from Monday to $74.07, the USDA said.
Separate U.S. government data showed Tuesday morning’s average cash hog price in Iowa/Minnesota at $43.00 per cwt, down 39 cents from Monday.
USDA estimated Monday and Tuesday’s total combined hog slaughter at 885,000 head, 18,000 more than the same period a year earlier.
“There are lots of hogs and not enough homes for them right now,” a Midwest hog merchant said, referring to full inventories at packing plants.
