By Theopolis Waters
CHICAGO, Jan 17 (Reuters) – Chicago Mercantile Exchange live cattle futures gained modestly on Friday and finished with their sixth straight weekly gain, boosted as wholesale beef prices stayed at record highs, traders and analysts said.
Friday morning’s wholesale choice beef price was $231.75 per hundredweight (cwt) in light sales volume, climbing $2.96 from Thursday to its seventh consecutive record, according to U.S. Department of Agriculture data.
The $3.44 jump in price to $228.95 for select cuts was their 11th straight record.
“It’s unprecedented,” R.J. O’Brien floor manager Jim Brooks said regarding the beef cutout’s record pace. “I can’t help but to think beef prices are going to cool and cash prices should set back some.”
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Lentil prices on the Canadian Prairies eased back during the week ended July 28, said Levon Sargsyan, broker with Johnston’s Grain. Sargsyan noted that’s due to the recent rains that brought relief to some of the dry areas of the region.
This week, cash cattle in the U.S. Plains fetched up to $144 per cwt., surpassing last week’s record price of $140, feedlot sources said.
He pointed out that cash cattle prices typically peak around mid January, which could prompt some traders to sell the February contract and buy deferred months.
Consolidation before the U.S. Martin Luther King Jr. holiday on Monday made for a choppy day of trading on Friday. The CME will be closed on Monday in observance of the holiday.
Investors are monitoring forecasts for another wave of frigid temperatures over the next several days that could slow down cattle weight gains.
Last week’s arctic blast disrupted livestock production in the Midwest, which contributed to record-high cattle and wholesale beef prices.
February live cattle closed 0.200 cents per pound higher at 140.350 cent, and April finished at 139.300 cents, up 0.075 cent.
The January CME feeder cattle futures closed at 170.000 cents per lb. up 0.200 cents, supported by its discount to the exchange’s feeder cattle index at 171.32 cents.
Profit taking pressured remaining feeder cattle contracts.
March finished at 167.925 cents per lb., down 0.325 cent, and April settled 0.625 cent per lb lower at 168.650 cents.
CASH PRICES WEAKENS HOG FUTURES
Profit taking led by lower cash prices undercut CME hog futures, traders and analysts said.
The afternoon’s average price of hogs in the closely-watched Iowa-Minnesota market was $2.09 per cwt. lower from Thursday at $76.51, according to USDA.
Investors sold February futures and bought back months with the view that hog prices might suffer in areas where packing plants will be closed for Monday’s holiday, a trader said.
Another bout of winter weather could briefly slow the flow of hogs to market. That comes as packers are sorting through supplies that had been delayed by last week’s storm.
This week, packers are on track to process 2.263 million hogs, 188,000 more than last week and up 57,000 from a year ago, based on USDA estimates.
February hogs closed at 86.175 cents per lb., 0.700 cent lower, and April ended at 91.900 cents, down 0.350 cent.
