By Theopolis Waters
CHICAGO, Jan 30 (Reuters) – Chicago Mercantile Exchange live cattle futures finished higher on Friday after an up-and-down session, ultimately supported by short-covering and futures’ discounts to cash prices, traders said.
February closed 1.325 cents per pound higher at 154.850 cents, and April up 1.775 cents to 152.275 cents.
This week, packers paid mostly $158 to $160.50 per hundredweight (cwt) for slaughter-ready or cash cattle in the U.S. Plains, compared with $158 to $160 a week ago, feedlot sources said.
Cash prices were better than expected after packers miscalculated the number of cattle needed based on current futures prices and sluggish wholesale beef movement, an analyst said.
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The morning’s Choice wholesale beef price dropped $1.20 per cwt from Thursday to $243.39. Select fell $1.31 to $237.03, the U.S. Department of Agriculture said.
CME live cattle fluctuated throughout the session, stirred by sporadic profit-taking and position evening on the last trading day of the month.
“The market was so volatile, it made it hard to trade,” said Oak Investment Group president Joe Ocrant.
USDA will issue the semi-annual cattle inventory report on Friday at 2:00 p.m. CST.
The government’s inventory report tend to not influence futures because the results project cattle production well beyond the contracts listed by the exchange.
CME feeder cattle climbed on short-covering, weak corn prices and live cattle futures gains.
March closed 1.625 cent higher at 205.200 cents per lb., and April up 1.200 cents to 205.400 cents.
FRONT-MONTH HOGS DOWN, OTHERS UP
CME lean hogs closed mixed on lower cash prices that stirred bear spreads consisting of investors who sold the nearby contracts and simultaneously bought back months.
February closed 1.075 cents per lb. lower at 67.475 cents and earlier hit a contract low of 67.375 cents in electronic trading. April ended down 0.950 cent to 72.250 cents.
Thinly-traded May closed 1.025 cents higher at 80.450 cents, and June up 0.475 cent to 84.100 cents.
The morning’s average cash hog price, on a carcass basis in Iowa-Minnesota was down $1.11 per cwt. from Thursday to $66.45 in light volume, the USDA said.
Cash hog prices continued to struggle amid ample supplies, but some short-bought packers may spend more for hogs next week, a trader said.
