CHICAGO, May 2 (Reuters) – Chicago Mercantile Exchange live cattle contracts on Monday landed in positive territory for a second straight session, driven by more short-covering and futures’ discounts to last week’s cash prices, traders said.
June live cattle closed 0.875 cent per lb higher at 115.800 cents, and August ended up 1.300 cents at 113.725 cents.
Last week packers paid mostly $124 per cwt for market-ready, or cash, cattle. That was down $3 from the week before, but undervalued compared to current futures prices.
Bullish investors look for wholesale beef prices to bottom out soon, which may motivate packers to raise bids for cash cattle later this week, a trader said.
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In a trading strategy known as bear spreading, traders sold the June contract and simultaneously bought August. The spread pushed August above the 10-day moving average of 113.63 cents, which triggered buy stops and fund buying.
Live cattle market advances boosted CME feeder cattle futures. May finished 1.000 cent per lb higher at 141.425 cents.
CME lean hogs ended higher for a fourth straight session, following continued cash hog price hikes and the morning’s strong wholesale pork values, traders said.
Thinly traded May ended 0.525 cent per lb higher at 78.425 cents, and most-active June closed 1.000 cent higher at 82.700 cents.
Cash hogs in the Midwest on Monday morning mostly traded 50 cents per cwt higher due to tight supplies, regional hog dealers said.
Monday morning’s wholesale pork price was $1.90 per cwt higher than on Friday at $84.44, the USDA said.
