By Theopolis Waters
CHICAGO, March 29 (Reuters) — Live cattle futures rose on Wednesday, with support from short-covering tied to futures’ discounts to preliminary cash prices, said traders.
April live cattle at the Chicago Mercantile Exchange closed 0.575 cent per pound higher at 121.350 cents, and June was up 0.250 cent to 111.850 cents.
Market-ready, or cash, cattle at Wednesday morning’s Fed Cattle Exchange yielded an average of $131.17 per cwt., down from last week’s $133.35 average.
On Tuesday some cash cattle in Texas and Kansas brought $123 to $126 per cwt. versus mostly $130 there last week, said feedlot sources.
Read Also
Alberta Crop Report: Rains in the south, dryness in the north
Rain fell onto the southern half of Alberta last week, while hot and dry conditions persisted in the northern half, according to the province’s crop report released on July 18.
Packer bids for remaining cattle in the U.S. Plains stood at $126 per cwt. versus up to $133 asking prices, said feedlot sources.
Plains cash cattle a week ago mostly sold from $130 to $134.50.
Processors resisted paying more for cattle while wrestling with declining margins and tepid seasonal wholesale beef demand, said traders and analysts.
They said cattle supplies are tight in parts of the Plains, but packers can draw from huge numbers of animals contracted against the futures market.
Wednesday morning’s average wholesale Choice beef price dropped 50 cents per cwt from Tuesday at $219.07.
Select cuts fell $1.25 to $211.77, the U.S. Department of Agriculture said.
Wednesday’s average beef packer margins were a positive $43.35 per head, down from a positive $116.45 a week ago, as calculated by HedgersEdge.com.
Live cattle futures gains, and higher cash feeder cattle prices, drove up CME feeder cattle contracts.
March feeder cattle, which will expire on Thursday, ended up 0.950 cent per pound to 133.300 cents.
Most actively traded April finished 1.450 cents higher at 134.400 cents.
FIRMER HOG FUTURES
Short-covering and bargain buying halted nearby CME lean hog contracts’ three-session decline prompted by recently slumping cash and wholesale pork prices, said traders.
Deferred-month investors adjusted positions before USDA’s quarterly hog report on Thursday at 2 p.m CDT.
April hogs ended up 0.200 cent per pound to 65.300 cents, and May up 0.075 cent to 69.475 cents.
More hogs are available as the weather warms in the Midwest, which allows pigs to add weight faster, said analysts and traders.
They said increased supplies have retailers waiting for pork prices to come down before actively buying product for spring grilling demand.
U.S. government data on Wednesday morning showed the average wholesale pork price $1.84 per cwt lower than on Tuesday to $75.77, led by $3.11 lower loins.
