By Theopolis Waters
CHICAGO, April 21 (Reuters) – Chicago Mercantile Exchange live cattle finished higher on Tuesday, supported by short-covering in the wake of recent market losses, traders said.
CME live cattle discounts to last week’s prices for market-ready, or cash, cattle provided more support, they said.
April closed 0.950 cent per pound higher at 156.300 cents, and June ended up 0.850 cent to 146.725 cents.
A week ago, cash cattle in the U.S. Plains moved at $160 to $163 per hundredweight (cwt.), steady to down $3.50 from the prior week.
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U.S. livestock: Cattle futures set record highs on scarce supplies
Chicago Mercantile Exchange live cattle and feeder cattle futures set record highs on Wednesday as cash prices stayed strong, along with consumers’ demand for beef, brokers said.
Bullish market participants predict positive margins will encourage some processors to spend the same for supplies as last week.
Contrarians said packers will continue to slow operations while waiting for spring grilling demand to ignite and cattle numbers to build seasonally.
The number of cattle placed in feedlots have declined each month since October, which means the accumulation of supplies has to come to market at some point, said University of Missouri economist Ron Plain.
Tuesday morning’s Choice wholesale beef price was at $260.70 per cwt., up $1.56 from Monday. Select cuts dropped $1.24 to $250.96, the U.S. Department of Agriculture said.
The government will issue the monthly cold storage report on Wednesday at 2 p.m. CDT, which will include total March beef and pork inventories.
A few analysts estimated last month’s total beef stocks on average at 498.1 million lb., and pork stocks at 691.8 million lb.
Short-covering, lower corn prices and live cattle market strength lifted CME feeder cattle futures.
April closed 0.825 cent per lb higher at 212.650 cents, and May ended 1.825 cents higher at 206.975 cents.
HOGS END HIGHER
CME lean hogs closed up sharply, mostly driven by short-covering and fund buying after contracts broke through technical resistance levels, traders said.
May closed 1.325 cents per lb. higher at 71.600 cents, and above the 10-day moving average of 70.88 cents. June closed at 77.600 cents, 2.075 cents higher and beyond the 40-day moving average of 76.33 cents.
Hog contracts gained despite inconsistent pork demand, softer cash prices and futures’ premiums to CME hog index for April 17 at 64.27 cents.
The morning’s cash prices for hogs in the western Midwest slumped $1.78 per cwt. in light volume to $60.65 from Monday, based on the USDA data.
Separate data showed Tuesday morning’s wholesale pork price rose 98 cents per cwt from Monday to $68.84.
