By Theopolis Waters
CHICAGO, July 24 (Reuters) — CME live cattle futures spiked higher early Thursday on soaring U.S. cash cattle prices but at the close futures were only a little higher.
The early rally sparked profit taking that briefly landed some contracts in negative territory mid morning.
August live cattle finished up 0.500 cent per pound to 156.550 cents, and October gained 0.050 cent to 158.050.
Futures spiked at first, driven by record-high prices for cash, cattle after packers found themselves short of supplies.
A few cash cattle in Kansas hit an all-time high of $162 per hundredweight, up $7 from last week, feedlot sources said. Cash cattle in Nebraska fetched $162 per cwt, $6 to $7 higher than a week ago, they said.
Read Also
Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Still, some investors pocketed profits before Friday’s USDA monthly Cattle-On-Feed report, but later placed long bets after beef cutout prices jumped to all-time highs.
Analysts expect Friday’s report to show fewer cattle entered feedlots last month than a year ago as ample pastures allowed ranchers to fatten animals on grass instead of shipping them to feedlots.
Thursday morning’s wholesale price, or cutout, for Choice beef surged $3.28 per cwt from Wednesday to a record $255.87. Select beef climbed $3.76 to a new top of $252.47, the USDA said.
Less product flowing into retail channels helped boost the cutout, a trader said. He also cited “perfect” grilling weather so far in parts of the country for beef price strength.
And, he said processors upped the price of beef at wholesale to counter higher prices for cattle.
CME feeder cattle closed mixed, supported by firm live cattle contracts but pressured by profit-taking.
August closed up 0.075 cent per lb. to 217.325 cents and September slipped 0.350 cent to 218.050.
HOGS LOVER
Chicago Mercantile Exchange hog futures on Thursday finished lower, pulled down by softer cash hog and wholesale pork prices, traders said.
August finished 1.375 cents per lb. lower at 123.200 cents, and October at 107.900, 2.550 cents lower.
The average price of market-ready, or cash, hogs Thursday morning in the eastern Midwest, fell $1.11 per cwt. from Wednesday to $123.68, according to the USDA.
USDA data showed the morning’s wholesale pork price at $131.95 per cwt., down 65 cents from Wednesday largely due to the nearly $8 slump in pork belly costs.
Some processors bought enough hogs for the rest of this week’s production, which further weighed on cash values.
Also, mild mid-summer temperatures are allowing hogs to gain weight quickly, which is helping to offset tight supplies caused by the virus that has killed millions of pigs since last year.
Bargain hunting and futures’ discounts to CME’s hog index, at 132.04, helped cushion market losses and might support hog trading months on Friday, traders said.
