CHICAGO, Feb 24 (Reuters) – Most Chicago Mercantile Exchange live cattle contracts rose on Wednesday, driven by rising wholesale beef values that may underpin prices for market-ready, or cash, cattle by Friday, traders said.
Thinly-traded spot February, which will expire on Feb. 29, closed down 0.025 cent per pound to 136.975 cents. April ended 0.650 cent higher at 136.150 cents and June 0.675 cent higher at 125.275 cents.
The morning’s wholesale Choice beef price jumped $2.27 per cwt from Tuesday to $217.41. Select cuts climbed $1.15 to $213.45, the U.S. Department of Agriculture said.
Easter’s early arrival this year on March 27 opens up the first weekend in April for grocers to potentially feature beef for spring grilling, said Doane Advisory Services economist Dan Vaught.
He said firm cash values are possible, citing the current April futures price and its tie to early beef buying for outdoor cook outs and reduced cattle slaughters during March and early April.
Cash bids in Texas were at $133 per cwt against asking prices there and elsewhere in the U.S. Plains of $138 to $140, said feedlot sources. Last week, cash cattle brought $133 to $134.
The beef cutout price three-day rally improved packer profits.
Wednesday’s average beef packer margin was a negative $24.35 per head, up from a negative $41.10 on Tuesday and negative $42.05 a week ago, as calculated by HedgersEdge.com.
Technical buying and live cattle futures advances lifted CME feeder cattle contracts. March closed 0.925 cent per lb higher at 157.950.
HIGHER HOG FUTURES SETTLEMENT
CME lean hogs moved higher, with help from buy stops and chart-related buying, traders said.
April closed up 1.525 cents per lb to 71.475 cents. Light-traded May finished up 0.925 cent per lb to 77.225 cents and above the 20-day moving average of 76.23 cents.
“The market is acting well technically, so I think that’s part and parcel what’s behind the strength,” said Vaught.
A winter storm moving across parts of the Midwest slowed movement of livestock to packing plants, which supported cash prices and further encouraged futures buying, said traders.
Wednesday morning’s average cash hog price in the western Midwest was up 40 cents from Tuesday in light volume to $63.09, the USDA said.
Packers on Wednesday processed 415,000 hogs, 18,000 fewer than last week, based on government data.
