@font-face { font-family: “Geneva”; }@font-face { font-family: “Cambria”; }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 14pt; font-family: “Times New Roman”; }span.btnaddtolb { }div.Section1 { page: Section1; }
By Theopolis Waters
CHICAGO, April 24 (Reuters) – Back-month Chicago Mercantile Exchange feeder cattle futures on Thursday set new contract highs, sparked by weak corn prices that could help ease input costs for feedlots, traders said.
Feeder cattle futures drew more support from buying in the neighboring CME live cattle pit.
May feeders gained more ground after breaking through the 20-day and 10-day moving averages of 179.058 cents and 179.255.
Read Also
Feed Grains Weekly: Price likely to keep stepping back
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.
August led advances after investors bought that contract and simultaneously sold May futures in a trading strategy known as bear spreading.
May closed 0.975 cent per pound higher at 179.600 cents. August ended up 1.600 cents to 184.050 cents, and hit a new contract high of 184.075 cents in after-hours electronic trading.
LIVE CATTLE EXTEND GAINS
CME live cattle gained for a third straight session, supported by stout wholesale beef demand, traders said.
April live cattle closed up 0.325 cent per lb. to 144.250 cents, and June ended at 135.850 cents, up 0.750 cent.
Thursday morning’s wholesale choice beef price was up $1.42 per hundredweight (cwt.) from Wednesday to $234.06. Select cuts rose $1.57 to $222.24, according to the U.S. Department of Agriculture.
Beef end users are stocking up to feature product during the spring grilling period, traders said.
Grocers competed for beef that was in short supply after some packing plants closed during the Easter holiday while others cut production to realign their margins, they said.
Futures’ discount to last week’s cash cattle prices attracted buyers. And traders bought June futures and at the same time sold April ahead of its April 30 expiration date.
Investors await this week’s cash cattle prices and Friday’s USDA monthly Cattle-On-Feed report.
Analysts expect Friday’s report to show the number of cattle placed in feedyards in March increased 0.8 percent from a year ago led by record-high prices for market-ready cattle.
Spotty cash cattle bids of $142 per cwt. surfaced in Texas and Kansas with no response from sellers, feedlot sources said.
Last week, cash cattle in Texas and Kansas moved at $147 per cwt., and at $148 in Nebraska, they said.
Despite solid beef demand and their improving margins, packers appear unwilling to spend more for cattle whose numbers have undergone a seasonal increase, a trader said.
HOGS RETREAT AFTER EARLY ADVANCES
CME hogs closed lower, pressured by profit-taking and futures’ premium to the exchange’s index at 117.69 cents, traders said.
Thursday morning’s 88 cents per cwt. wholesale pork price drop from Wednesday to $116.53, and near-term cash price uncertainty given fading packer margins, pared early-session gains, a trader said.
The government’s morning direct market hog price data was unavailable. Hogs in the Midwest early Thursday traded mixed, hog dealers said.
May hogs closed 1.075 cents per lb. lower at 122.900 cents.
Most-actively traded June ended 0.700 cent lower at 125.550 cents, and July down 0.050 cent to 123.950 cents.
