CHICAGO, Oct 19 (Reuters) – Chicago Mercantile Exchange live cattle futures ended higher for a second straight session on Monday, supported by the morning’s wholesale beef price increase, traders said.
Spot October closed 2.325 cents per lb higher at 138.275, and December up 2.225 cents to 141.650.
Monday morning’s wholesale choice beef price, or cutout, climbed $1.44 cents per cwt from Friday to $213.13 per cwt. Select cuts rose 85 cents to $207.21, the U.S. Department of Agriculture said.
However, sales volume at 74 loads was the smallest for the morning report since 63 loads on Sept. 4, and well shy of the most recent peak of 190 loads on Oct. 7.
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Beef demand should remain steady through the first few weeks in November until hams and turkey dominate meat promotions through the winter holidays, said Doane Advisory Services economist Dan Vaught.
Investors eagerly await prices for market-ready, or cash, cattle later this week after packers paid almost $20 per cwt more for supplies within the past two weeks.
A week ago, cash cattle brought $134 to $137 per cwt, up from $126 to $127 the week before.
After producers cleaned up most of the surplus heavyweight cattle in late September through early October that “tanked” the cash market, circumstances have changed thanks to improved beef demand and tighter supplies than a month ago, said Vaught.
Cash prices recently climbed faster than wholesale beef values which trimmed packer margins.
The average beef packer margin for Monday was $75.50 per head, down from $83.35 on Friday and $117.15 a week earlier, as calculated by HedgersEdge.com.
CME October feeder cattle ended 1.200 cents per lb higher at 195.000 cents, helped by weak corn prices and strong live cattle futures.
CME lean hog investors sold deferred months and simultaneously bought the December contract because of its sizable discount to the exchange’s hog index for Oct. 15 at 74.96 cents, traders said.
They said other hog contracts were pressured by abundant seasonal supplies that weighed on cash and wholesale pork prices.
December finished up 0.400 cent per lb at 65.975 cents, February was down 0.475 cent to 67.975 cents and April 0.500 lower at 71.450.
The government reported the morning’s average cash hog price in the western Midwest at $70.78 per cwt, $2.28 lower than on Friday.
The morning’s wholesale pork price was at $88.77 per cwt, down 54 cents from Friday, USDA said.
