CHICAGO, April 26 (Reuters) – Chicago Mercantile Exchange live cattle buying on Tuesday carried over into Wednesday, led by brisk wholesale beef demand and futures’ discounts to expectations for cash prices this week, said traders.
At 9:53 a.m. CDT April, which will expire on Friday, was 1.450 cents per pound higher at 131.275 cents, and June was up 1.125 cents to 116.950 cents.
Tuesday afternoon’s average wholesale beef price, or cutout, was up 34 cents per cwt to $219.01 from Monday. Select cuts climbed $1.98 to $206.27, the U.S. Department of Agriculture said.
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Retail beef buying for spring grilling and coming Mother’s Day promotions propped up cutout values and could help cash cattle prices, an analyst said.
He cited fewer cattle for sale than last week and tight supplies in parts of the U.S. Plains as additional supportive cash price influences.
Last week market-ready, or cash, cattle in the Plains brought $130 to $133 per cwt.
Investors await Wednesday morning’s Fed Cattle Exchange sale of about 5,400 animals. Cattle last week there on average fetched $128.62 per cwt.
FEEDER CATTLE
The April contract, which will expire on Thursday, was up 0.575 cent to 139.300 cents per pound. Most actively-traded May was up 1.650 cents to 139.325 cents.
More live cattle futures gains and strong cash feeder cattle returns sent CME feeder cattle higher.
LEAN HOGS
Thinly-traded May was up 0.525 cent per pound to 65.750 cents, and most actively-traded June was up 0.400 cent to 72.225 cents.
Follow-through buying, spillover live cattle market support and short-covering lifted CME lean hogs, said traders.
They said Tuesday’s mixed, rather than higher, cash prices and lower pork cutout values limited market advances.
Some packers have enough hogs for the second half of the week while others may have difficulty filling inventories as supplies begin to decline seasonally, a trader said.
He said Tuesday’s pork cutout price setback was largely due to weaker pork bellies, which might entice processors to store more product for summer use.
Iowa/Minnesota hog weights for the week ended April 22 averaged 284.9 pounds, up 1.1 pounds from the week before and up 0.9 pound from a year ago, based on Wednesday’s USDA data.
Last week’s hog weight gain may reflect the inability of farmers to market their pigs during plant shutdowns over the Easter holiday, an analyst said.
