By Theopolis Waters
CHICAGO, Jan 18 (Reuters) – Chicago Mercantile Exchange live cattle futures closed higher on Wednesday for a third day in a row, following the morning’s wholesale beef price upswing and initial cash price strength, traders said.
February live cattle closed 0.700 cent per pound higher at 120.275 cents, and April closed up 0.400 cent to 119.400 cents.
Both contracts hit 10-month highs for a second consecutive session.
Wednesday morning’s Choice wholesale beef price, or cutout, climbed $1.39 per cwt from Tuesday, at $193.01.
Select cuts rose 93 cents to $188.16, the U.S. Department of Agriculture said.
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Cattle at Wednesday morning’s Fed Cattle Exchange, on average, brought $120.50 per cwt, up from last week’s $119 average. Processors have not bid for remaining slaughter-ready, or cash, cattle in the U.S. Plains that are priced at $122 per cwt.
Plains’ cattle last week fetched $118 to $120.
Packers may be eyeing reduced supplies during the first quarter, and the beef market helped after unraveling for most of last week, said U.S. Commodities analyst Don Roose.
Investors also pointed out that there are roughly 20,000 fewer cattle for sale than last week, partly because of Monday’s holiday and the ice storm that crippled areas of the Plains and Midwest over the weekend.
CME feeder cattle closed mostly lower with February futures supported by firmer live cattle contracts. Other trading months were pressured by sell stops and profit-taking.
January feeders ended up 0.075 cent per pound to 131.000 cents. March closed 0.500 cent lower at 129.550 cent, and April down 0.425 cent to 129.075 cents.
LOWER HOG FUTURES
Profit-taking and Wednesday morning’s wholesale pork price retreat dropped CME lean hogs, traders said.
They said sell stops and technical selling contributed to market losses.
February hogs ended 0.600 cent per pound lower at 65.200 cents. April closed 0.900 cent lower at 68.825 cents, and below the 10-day moving average of 68.943 cents.
USDA data on Wednesday morning showed the average wholesale pork price tumbled $2.36 to $78.17 from Tuesday, mostly led by $7 lower prices for picnic shoulder cuts.
Market bulls worry that the 12-session cash price rally may stall soon, in spite of talk that packers are still struggling to fill inventories amid tight supplies.
Hog merchants project a roughly 280,000-head Saturday slaughter. It will include plants making up downtime after Monday’s holiday and the recent icy weather in parts of the Midwest.
