CHICAGO, Nov 25 (Reuters) – U.S. cattle and hog futures extended gains to fresh multi-month highs on Friday, buoyed by technical buying and strong demand from beef and pork packers, traders said.
Live cattle jumped more than 1 percent at the Chicago Mercantile Exchange, capping their fifth consecutive week of higher prices. Lean hog futures surged nearly 3 percent, notching their third straight weekly gain.
Higher cash cattle prices in the southern U.S. Plains on Wednesday boosted futures when trade resumed following Thursday’s halt for the U.S. Thanksgiving Day holiday. Packers bought cattle at prices ranging from $110 to $113, up from deals in the previous week of about $108 to $110.
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“Sales on Wednesday were much better than expected in the (cash) cattle,” Allendale Inc analyst Rich Nelson said.
Front-month CME December cattle finished 1.075 cents higher at 110.750 cents lb per, increasing their weekly gain to 4.9 percent. Most-active February cattle futures were up 1.400 cents to 112.200 cents, highest since Aug. 22.
Futures trading volumes on Friday were thin in an abbreviated session following Thursday’s holiday, making prices more vulnerable to volatile swings.
Meat packers boosted their cattle and hog slaughters this week to take advantage of big profit margins and to meet holiday demand from retailers for the late-December holiday season.
The estimated slaughter of 551,000 cattle was above the same week last year of 458,000 head, and the hog slaughter of 2.152 million head was up from 2.110 head during the same week in 2015, according to the U.S. Department of Agriculture.
“Packer margins have narrowed significantly from their peak, but remain solidly positive,” advisory HedgersEdge said in a client note.
CME December lean hogs were up 1.300 cents to 51.050 cents per lb, highest since Sept. 14. The contract gained 6.8 percent for the week.
CME January feeder cattle ended 2.325 cents higher at 127.225 cents per lb, gaining 1.8 percent for the week.
