By Theopolis Waters
CHICAGO, April 14 (Reuters) – Chicago Mercantile Exchange live cattle contracts closed higher on Tuesday, led partly by the day’s wholesale beef price upswing, traders said.
April ended up 0.775 cent per pound at 159.600 cents, and June 1.475 cents higher at 150.425 cents.
Tuesday morning’s Choice wholesale beef price jumped $1.60 per hundredweight (cwt) from Monday to $259.30. Select cuts were up $1.55 at $250.74, the U.S. Department of Agriculture said.
Packers recently curbed production to try to pressue cash cattle lower, recover lost margins and elevate wholesale beef values.
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The day’s beef packer margins were a negative $18.30 per head, compared with a negative $55.10 on Monday and a negative $45.90 a week ago, according to Hedgersedge.com.
Futures’ discounts to last week’s prices for market-ready, or cash, cattle stirred additional buying despite lower cash expectations for this week because of more livestock for sale.
Last week, cash cattle in the U.S. Plains moved at $163 to $165.50 per cwt.
June moved beyond the 100-day moving average of 150.08 cents, which touched off fund buying and buy stops.
CME feeder cattle contracts drew support from live cattle futures buying and futures’ discounts to the exchange’s latest feeder cattle index at 219.57 cents.
April closed 0.950 cent per lb. higher at 213.200 cents, and May up 0.750 cent at 210.800 cents.
HOGS MOSTLY WEAK
CME’s April lean hog contract was supported by speculation about where it will settle after it expires on Wednesday.
Lower cash hogs and wholesale pork prices pressured May and June futures that will draw the attention of investors following April’s expiration, they said.
April closed up 0.075 cent per lb. at 63.175 cents, May 0.725 cent lower at 71.700 cents and June finished down 0.300 cent at 78.475 cents.
The USDA data showed the morning’s average cash hog price in Iowa-Minnesota was $61.09 per cwt in light volume, down $1.26 from Monday.
Separate government data showed the morning’s wholesale pork price dropped 62 cents per cwt. from Monday to $65.35, the USDA said.
An attitude has begun to develop that hog prices may have bottomed out amid tight supplies and weaker product prices might generate more demand, said Tippens.
