By Theopolis Waters
CHICAGO, June 15 (Reuters) – Most Chicago Mercantile Exchange live cattle contracts gained modestly on Monday, supported by short-covering and futures’ discounts to last week’s cash prices, traders said.
Investors bought deferred contracts and simultaneously sold June ahead of its expiration on June 30, they said.
June closed down 0.275 cent per pound to 152.175 cents, August 0.325 cent higher at 151.125 cents and October up 0.300 cent to 153.500 cents.
Last week, cash cattle in the U.S. Plains fetched $152 to $155 per hundredweight versus $155 to $156 the week before, feedlot sources 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.
There are roughly 10,000 more cattle for sale this week compared to an increase last week of about 40,000 head, traders and analysts said.
Reduced kills and last-minute retail beef buying for Father’s Day might underpin beef cutout values, they said.
Monday morning’s wholesale Choice beef price was up 38 cents per cwt. from Friday to $246.10. Select cuts were down a penny to $240.41, the U.S. Department of Agriculture said.
For the week ending June 13, packers processed 10.6 percent fewer cattle than a year ago, resulting in 8.5 percent less beef.
Short-covering, back-month live cattle market advances and lower corn prices boosted CME feeder cattle contracts.
August ended 0.450 cent per lb higher at 223.900 cents.
HOGS SETTLE LOWER
CME lean hogs closed lower, as abundant supplies kept a lid on cash prices, traders said.
July closed 0.850 cent per lb. lower at 77.200 cents, and August down 1.250 cents to 75.475 cents.
Hog prices in the Midwest Monday morning were steady to down 50 cents per cwt, regional hog dealers said.
Last week’s hog slaughter climbed 11.2 percent and pork output rose 10.3 percent from a year earlier, based on USDA data.
The government quoted the morning’s wholesale pork price at $85.28 per cwt., up 42 cents from Friday driven by $11.56 higher ribs.
“The industry could move a lot of product if we have good weather going into Father’s Day and retailers have to restock for the long July 4th holiday,” said JBS Trading Co. president James Burns.
Investors bought July and at the same time sold August, which dropped the contract to its lowest level since March 24th.
Deferred-month selling reflected investor caution that USDA’s quarterly hog report on June 26 might show more hog production than anticipated.
