By Theopolis Waters
CHICAGO, March 2 (Reuters) – Chicago Mercantile Exchange live cattle futures closed higher on Monday, supported by their discount to what packers paid for market-ready or cash cattle last week, traders said.
“We had the board (futures) too cheap when the February contract expired last Friday,” said Vetterkind Cattle Brokerage president Troy Vetterkind.
April closed 1.750 cents higher at 153.450 cents, and June up 1.950 cents to 145.800 cents.
Last week, cash cattle in Kansas and Nebraska sold at mostly $158 to $160 per hundredweight (cwt), which was steady to $2 lower than the week before.
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Chicago Mercantile Exchange cattle futures fell for a third consecutive day on Thursday in profit-taking and technical selling setback following recent highs and amid some weaker-than-expected cash market sales this week.
Monday morning’s choice wholesale beef price rose 79 cents per cwt to $248.37 per cwt from Friday. Select cuts dipped 10 cents to $245.47, the U.S. Department of Agriculture said.
April and June gained further after earlier piercing their respective 40-day moving average of 153.07 cents and 145.86 cents, which triggered buy stops and fund buying.
June futures led the charge after funds sold, or rolled, some of their April long positions and at the same time bought the June contract.
Investors implemented the trading strategy ahead of similar moves later in the week tied to the Standard & Poor’s Goldman Sachs Commodity Index (S&P GSCI).
CME live cattle gains, chart-related buying and lower corn futures perked up the exchange’s feeder cattle contracts.
March closed 2.200 cents per lb higher at 204.100 cents, and April up 1.800 cents to 202.125 cents.
HOGS FIRM AFTER CHOPPY SESSION
CME lean hogs gained modestly in choppy trading on technical buying and buy stops, traders said.
Profit-taking and uncertainty about cash and wholesale pork prices in the near term limited futures advances, they said.
April futures closed up 0.200 cent per lb to 67.675 cents, with May 0.400 cents higher at 80.300 cents.
Cash hogs in the Midwest on Monday morning traded steady with Friday’s prices, regional hog dealers said.
USDA data showed the morning’s wholesale pork price was up 7 cents per cwt from Friday to $70.58.
Packers may cut kills to conserve their margins, drive up wholesale pork values and avoid spending more for hogs.
But more wintry weather moving eastward across the Midwest could reduce livestock availability while further hampering East Coast meat consumption.
