By Theopolis Waters
CHICAGO, Feb 9 (Reuters) – Chicago Mercantile Exchange live cattle futures closed in positive territory for a third straight session, helped by their discounts to last week’s better-than-expected cash prices, traders and analysts said.
February closed up 2.375 cents per pound to 158.450 cents, and April 2.625 cents higher at 153.650 cents.
Last week, cash cattle in the U.S. Plains sold at US$160 to $162.50 per hundredweight (cwt.), steady to $3.50 higher than the week before, feedlot sources said.
Bullish investors believe that last week’s short-bought packers, fewer cattle for sale and recent futures’ gains might underpin cash prices this week.
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Market bears said unprofitable packer margins and competition from less-costly pork and chicken could weigh on cash prices.
The afternoon’s Choice wholesale beef price declined 60 cents from Friday to $238.48. Select cuts fell $1.51 to $232.30, the USDA said.
Fund buying developed after April and June futures surpassed the 20-day moving average of 151.73 cents and 144.90 cents, respectively.
Technical buying, CME live cattle market advances and steady-to-higher cash feeder cattle prices drove up the exchange’s feeder cattle contracts.
March closed 4.175 cents per lb. higher at 203.625 cents, and April up 4.125 cents to 203.275 cents.
HOGS AT MULTI YEAR LOW
CME lean hogs returned to their lowest level in six years on Monday, pressured by softer cash prices and profit-taking after a futures rally last Friday, traders said.
February closed 2.600 cents per lb. lower at 61.275 cents, and April down 2.525 cents to 66.750 cents.
Monday afternoon’s average market-ready or cash hog price in Iowa-Southern Minnesota slipped 35 cents per cwt. from Friday to $60.59, the U.S. Department of Agriculture said.
Separate USDA data showed the morning’s wholesale pork price at $73.70 per cwt., up 76 cents from Friday when it was down $1.03 from the previous session.
Sufficient hog numbers and sputtering wholesale pork sales caused packers to spend less for supplies, which sustained their profitable margins.
The U.S. west coast labour dispute has backed up significant amounts of U.S. pork for export that has to be disposed of domestically, said Linn Group analyst John Ginzel.
U.S. west coast ports resumed full operations on Monday after shippers suspended loading and unloading last weekend.
Investors sold the February contract, which will expire on Feb. 13, and simultaneously bought back months that were pressured by anticipation of increased supplies ahead.
