CHICAGO, April 10 (Reuters) – Chicago Mercantile Exchange live cattle rose for a fourth consecutive session on Monday, fueled by short-covering and futures’ discounts to last week’s cash prices, said traders.
Last weekend’s news that China offered to lift its ban on U.S. beef helped spike Chicago Mercantile Exchange over 1 percent on Monday. But, futures have since slid from session highs on skepticism whether the Chinese will follow through on
their offer.
“There was some initial futures market optimism regarding China. But now it’s wait and see,” said Brock Associates Inc. analyst Doug Houghton.
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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.
April live cattle closed 1.050 cents per pound higher at 121.100 cents, and June ended up 0.500 cent to 112.300 cents.
Last week, a small number of market-ready, or cash, cattle in the U.S. Plains generally traded at $124 to $126 per cwt versus mostly $128 to $130 a week earlier.
Market participants again expect softer cash prices this week based on negative packer profits and seasonally slow wholesale beef demand.
There are plenty of cattle for packers that are planning closures over the Easter holiday. Less beef as a result of plant disruptions could help reverse the almost two-week wholesale beef price slide, said traders and analysts.
Monday afternoon’s average wholesale beef price was up 24 cents per cwt to $207.46 from Friday. Select cuts dropped 89 cents to $196.60, the U.S. Department of Agriculture said.
CME feeder cattle landed in bullish territory for a third straight session, and back months hit new highs, led by strong cash feeder cattle prices and more live cattle futures gains.
April feeder cattle closed 1.550 cents per pound higher at 135.300 cents.
Deteriorating cash hog prices weighed on CME April lean hogs, that were also felt pressure after investors sold the contract and simultaneously bought deferred months, said traders.
April hogs , which will expire on April 17, ended unchanged at 63.325 cents. May closed up 0.350 cent to 69.350 cents. Most-actively traded June settled 0.500
cent higher at 73.275 cents.
Seasonally building supplies, and packers requiring fewer hogs before plants close over the Easter holiday, continued to drag down cash prices, said traders and analysts.
They said some grocers bought pork to avoid potential meat shortages resulting from holiday plant closures.
U.S. government data on Monday afternoon showed the average wholesale pork price up $1.42 per cwt from Friday to $76.70, mostly because of $7.95 higher pork bellies.
