CHICAGO, Dec 1 (Reuters) – Lightly traded Chicago Mercantile Exchange feeder cattle contracts on Monday closed up the maximum three-cents-per-pound daily price limit, fueled by live cattle futures’ rebound, traders said.
Fund buying and buy stops contributed to CME feeder cattle market advances, they said.
January closed at 234.075 cents and March at 233.200 cents.
LIVE CATTLE RECOVER
CME live cattle ended higher, partly on strong wholesale beef values and futures’ discounts to recent prices for market-ready or cash cattle.
Monday morning’s choice wholesale beef price rose $1.15 per hundredweight (cwt) in light volume from Friday to $258.55. Select was up 68 cents to $246.53, the U.S. Department of Agriculture said.
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Last week, cash cattle in the U.S. Plains moved at mostly $172 to $173 per cwt, which was about the same as the previous week, feedlot sources said.
Grocers are featuring beef as consumers crave meat proteins other than turkey and ham after the Thanksgiving holiday, an analyst said.
Packers may again try to bridle cash spending while operating their facilities deep in the red, he said.
Beef packer margins for Monday were a negative $106.15 per head, compared with a negative $99.80 on Friday and a negative $84.80 a week earlier, according to Colorado-based analytics firm Hedgersedge.com.
Fund buying developed after December and February moved beyond their respective 20-day moving averages of 168.72 cents, and 169.77 cents, which setoff buy stops.
December closed 1.075 cents per lb. higher at 169.950 cents, and February up 1.625 cents to 170.850 cents.
MOST HOGS END HIGHER
CME lean hogs closed mostly higher after cash price uncertainty stirred bear spreading, which consisted of traders who sold December futures and simultaneously bought deferred months.
December closed down 0.200 cent per lb. at 90.125 cents, February 0.700 cent higher at 88.925 cents and April up 0.100 cent at 91.700 cents.
Slaughter-ready or cash hogs in the Midwest on Monday morning traded mostly steady, regional hog dealers said.
Some packers are snug on early-week inventories, but others will actively book hogs whose numbers tend to decline seasonally as frigid weather causes them to gain weight slowly.
Investors are eyeing pork demand as processors highlight cuts other than ham to compete with beef ribeyes and roasts in the coming weeks.
USDA data showed Monday morning’s wholesale pork price jumped $1.39 per cwt from Friday to $94.53, led by $5.85 higher sparerib costs.
