By Theopolis Waters
CHICAGO, Oct 22 (Reuters) – Chicago Mercantile Exchange live cattle futures on Wednesday erased Tuesday’s losses, aided by short-covering and the upswing in wholesale beef prices, traders said.
October closed up 1.500 cents to 168.050 cents per pound, and December was 1.050 cents higher at 168.100 cents per lb.
Wednesday morning’s choice wholesale beef price rose 92 cents to $250.76 per hundredweight (cwt) from Tuesday. Select climbed 72 cents to $235.65, the U.S. Department of Agriculture said.
Packers raised wholesale beef costs to shore up their slumping margins and offset possibly higher market-ready or cash cattle prices this week, traders and analysts said.
Read Also

U.S. grains: Soybean futures set two-week high on US weather worry, soyoil rally
Chicago Board of Trade soybean futures touched a two-week high on Friday on worries that heat may threaten U.S. crops and expectations that the country’s biofuel policy would boost demand for soyoil, analysts said.
Last week, the bulk of cash cattle in the U.S. Plains moved at $164 per cwt.
USDA will issue the monthly cold storage report on Wednesday at 2 p.m. CDT, which will include total September beef and pork inventories.
A few analysts forecast an average September inventory total of 343.3 million lbs for beef and 560.1 million lb. for pork.
The government’s monthly Cattle-On-Feed report is at 2 p.m. CDT on Friday.
Most analysts expect Friday’s data to show increased placements of cattle in U.S. feedlots last month versus a year ago.
CME feeder cattle contracts drew support from short-covering, fund buying and live cattle futures’ gains.
October closed up 0.500 cent to 239.450 cents per lb., and November 1.250 cents higher at 235.175 cents.
HOGS CLOSE HIGHER
Bargain hunters and speculators searching for a market bottom boosted CME hogs in the face of sustained bearish fundamentals, traders said.
Futures’ discount to CME’s hog index at 105.45 cents, encouraged buyers.
December finished 1.300 cent higher at 89.750 cents per lb., and February was up 1.775 cents to 87.850 cents per lb.
The morning’s average hog price in the eastern Midwest region was down $1.16 cents per cwt from Tuesday to $94.31, according to USDA.
Separate government data showed Wednesday morning’s wholesale pork price fell $2.71 to $101.33 per cwt. from Tuesday, mainly due to lower ham and loin values.
Packers are not actively bidding up for hogs whose numbers, and weights, have grown seasonally while increasing pork tonnage.
On Wednesday, packers processed 429,000 hogs, up 1,000 from last week and 4,000 more than a year ago, based on USDA data.
“Maybe people got too short … but we know the cash market is going to grind lower. Any rally is short-lived until something really big comes out,” said JBS Trading Co president James Burns.
Deep-deferred hog contracts led advances in anticipation of possibly tight hog supplies during that period as U.S. and Canadian farmers continue to cope with the deadly pig virus.