July 24 (Reuters) – Early on Thursday, cash cattle in Kansas fetched an all-time high of $162 per hundredweight (cwt), up $7 from last week, according to feedlot sources.
Chicago Mercantile Exchange August live cattle futures on Thursday morning gained for a sixth straight session following record-high prices for cash cattle, traders said. But by mid morning defered contracts were lower.
Cash cattle in Nebraska sold at $162 per cwt, $6 to $7 higher than a week ago, they said.
“Packers were short-bought cattle and desperate to fill inventories,” a feedlot operator said.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Short-covering and futures’ discount to cash prices contributed to advances in the CME markets.
Investors are waiting to see if the morning’s rally will hold heading into the U.S. Department of Agriculture’s monthly Cattle-On-Feed report on Friday afternoon.
Analysts expect the report to show healthy grazing land slowed down the placement of cattle into feedlots last month versus a year earlier.
Thursday morning’s USDA export data for the week ended July 17 showed U.S. beef sales at 10,800 tonnes, mostly to Japan, compared with 8,900 tonnes a week earlier.
In the feeder cattle market the August contract was up 0.450 cent to 217.700 cents per pound, and September was down 0.075 cent to 218.325.
CME feeder cattle traded mixed in choppy action, supported by higher live cattle futures but pressured by profit-taking.
In the Chicago lean hog market the August contract fell 2.075 cents to 122.500 cents, and October was down 2.950 cents to 107.500 cents.
CME hogs slumped in response to lower trending cash hog and wholesale pork values, traders said.
The average price of hogs Wednesday afternoon in Iowa/Minnesota dropped 80 cents per hundredweight from Tuesday to $125.23, according to USDA data.
Separate government data showed the afternoon’s price for pork at wholesale at $132.60 per cwt, $1.24 lower than on Tuesday.
Sufficient supplies of hogs at heavier weights are pressuring cash prices, a trader said. Grocers are hesitant to buy large amounts of pork at current prices, he said.
Sell stops and fund liquidation earlier dropped some deferred hog contracts by their 3-cents maximum daily price limit.
Thursday’s USDA export data showed U.S. pork sales at 4,300 tonnes, mostly to Japan, compared with 3,400 tonnes the week before.
