By Theopolis Waters
CHICAGO, March 24 (Reuters) – Chicago Mercantile Exchange live cattle closed higher for a sixth consecutive session on Tuesday, partly led by a bounce in wholesale beef prices, traders said.
April closed 0.650 cent per pound higher at 162.000 cents, and June up 0.050 cent to 153.050 cents.
The morning’s Choice wholesale beef price climbed $1.12 per cwt from Monday to $246.91. Select cuts jumped $1.64 to $244.87, the U.S. Department of Agriculture said.
Processors cut slaughters to improve their margins, which made beef less available to wholesalers, traders and analysts said.
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U.S. livestock: Cattle futures end lower in profit-taking, technical correction
Chicago Mercantile Exchange cattle futures declined for a second straight session on Wednesday in a profit-taking and technical-selling correction from recent highs.
On Monday and Tuesday, packers processed a total of 212,000 head of cattle, 8,000 fewer than last week, based on USDA data.
Futures’ discounts to last week’s cash prices at times encouraged buyers, while profit-taking and anticipation of increased supplies this summer limited advances.
Last week, cash cattle in the U.S. Plains fetched $163 to $165 per hundredweight (cwt).
Live cattle futures buying and higher cash feeder cattle prices underpinned the March CME feeder cattle contract.
Profit-taking and futures’ premiums to the exchange’s feeder cattle index for March 20 at 215.60 cents weighed on remaining trading months.
March, which will expire on March 26, closed up 0.200 cent per lb. to 217.175 cents, April down 0.250 cent to 218.925 cents and May finished 0.800 cent lower at 217.875 cents.
NEARBY HOGS DOWN, OTHERS UP
CME lean hogs’ April and May futures slumped with cash prices due to ample supplies and tepid wholesale pork demand, traders said.
The morning’s average hog price in Iowa/Minnesota was $56.20 per cwt., down 87 cents from Monday, according to USDA.
Separate government data showed the morning’s wholesale pork price up five cents per cwt from Monday to $67.94.
Traders sold nearby contracts and simultaneously bought deferred months in a trading strategy known as bear spreading that was further supported by bargain hunting.
“It’s all about how much of the bearishness has been dialed in before Friday’s USDA quarterly hog report,” said U.S. Commodities analyst Don Roose.
April closed down 0.650 cent per lb. to 58.600 cents, and thinly traded May 2.525 cents lower at 66.150 cents.
June hogs finished 1.050 cents higher at 74.675 cents, and July up 0.800 cent to 75.250 cents.
