By Theopolis Waters
CHICAGO, Aug 13 (Reuters) – Chicago Mercantile Exchange live cattle futures closed higher on Thursday, fueled by short-covering and technical buying that turned back initial selling, traders said.
October led the day’s rally as investors bought that contract and simultaneously sold August ahead of its expiration on Aug. 31.
Spot-August futures closed up 0.150 cent per pound at 148.850 cents. October ended 1.250 cents higher at 147.850 cents, and above the 20-day moving average of 147.25 cents.
CME live cattle’s turnaround, along with much-improved packer margins, backed expectations of packers paying about the same this week for cash cattle as last week.
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For the week ending July 26, Western Canadian feeder cattle markets were relatively unchanged from seven days earlier. Yearlings off grass weighing 900 pounds plus were very strong and may have been up $3 to $5 from the previous week.
Traders worried that the morning’s mixed-rather-than higher beef cutout values suggests that the recent uptrend in wholesale prices might end soon.
Thursday morning’s wholesale Choice beef price rose $1.26 per cwt from Wednesday to $245.28. Select cuts slipped 26 cents to $235.19, the U.S. Department of Agriculture said.
CME feeder cattle drew support from technical buying and live cattle market gains.
August closed up 0.150 cent per lb to 214.025.
HOGS UP WITH PORK, DISCOUNTS
Thursday morning’s wholesale pork price upswing, and futures’ discounts to CME’s hog index for Aug. 11 at 78.67 cents, drove up the exchange’s lean hog contracts, traders said.
October and December rolled through chart resistance levels, which ignited fund buying and buy stops, they said.
Spot-month August, which will expire on Friday, closed 0.775 cent higher at 78.625 cents.
Most-active October ended 1.675 cents higher at 65.050, and above the 10-day moving average of 64.458 cents. December finished 1.125 cents higher at 61.225 cents, and surpassed the 20-day moving average of 61.13 cents.
The morning’s wholesale pork price was at $91.24 per cwt., $1.16 higher than on Wednesday, USDA said.
Armed with “impressive” margins, packers are close buying all the hogs they need into early next week, a trader said. Grocers are booking pork for Labor Day holiday barbecuing in early September, he said.
The average Thursday morning price for cash hogs in Iowa/Minnesota had dipped 30 cents from Wednesday to $75.69, USDA said.
Pork processor margins for Thursday were at $24 per head, compared with $27.25 on Wednesday and $19.15 a week ago, as calculated by HedgersEdge.com.
