By Theopolis Waters
CHICAGO, April 23 (Reuters) – Chicago Mercantile Exchange live cattle futures closed up the three-cents per pound price limit Thursday, on higher wholesale beef values and better-than-expected subsequent cash prices, traders said.
April and June ended at 159.300 cents and 149.025 cents per lb. CME’s live cattle trading limit will be expanded to 4.500 cents on Friday following Thursday’s limit-up settlement.
“To see cash trading already $2 per cwt. higher today has definitely spurred some excitement,” said Top Third Ag Marketing analyst Craig VanDyke, citing disappointing cash prices on Wednesday and in recent weeks.
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On Thursday, market-ready, or cash, cattle in Kansas moved at $158 per hundredweight (cwt.), and $158 to $160.50 in Nebraska, according to industry sources. On Wednesday, cash cattle in the U.S. Plains sold at $157 to $158, they said.
Thursday morning’s Choice wholesale beef price was at $260.27 per cwt., up 21 cents from Wednesday. Select cuts jumped $1.67 to $251.19, the U.S. Department of Agriculture said.
Some packers held off buying cattle in anticipation of a seasonal bump in supplies, but others need them to replenish low inventories, traders said.
Positive packer margins, and futures’ rally on Thursday, emboldened some feedlots with unsold cattle to hold out for more money, they said.
Technical buying surfaced after June barely filled its chart gap, marked by last Friday’s 149.000 cents low and Monday’s 148.425 cents high.
Investors await USDA’s monthly Cattle-on-Feeder report on Friday.
CME feeder cattle posted significant gains, with some contracts up the 4.500-cents price limit, following live cattle’s limit-up move.
The trading limit for feeder cattle will be increased to 6.750 cents on Friday.
April closed 1.725 cents per lb. higher at 214.275 cents. May and August finished up 4.500 cents to 211.250 cents and 212.950 cents, respectively.
HOGS CLIMB WITH PORK PRICES
CME lean hogs closed sharply higher in response to a wholesale pork price bounce, traders said.
Short-covering, buy stops and fund buying contributed to futures advances, they said.
May closed 1.225 cents per lb. higher at 71.925 cents, and June was up 2.375 cents at 78.325 cents.
USDA data showed Thursday morning’s wholesale pork price surged $3.68 per cwt from Wednesday to $71.16.
Packers are cautiously buying hogs to conserve their margins while waiting for consistent wholesale pork demand to develop.
“If we really want to move this cash market, we’ve got to pick it up in the product market,” said VanDyke.
