CHICAGO, Nov 3 (Reuters) – U.S. live cattle futures surged more than two percent on Friday, rising by as much as their three cent daily price limit on technical buying and following gains in cash cattle markets late Thursday, traders and analysts said.
All but front-month December live cattle reached life-of-contract highs while feeder cattle futures contracts also climbed to new peaks.
The gains came after beef packers paid prices ranging from about $121 to $125 per cwt. for fed cattle at southern U.S. Plains feedlots, above deals of $116 to $119 last week.
“Packer margins are still very good, so there was room (for cash cattle trade) to go higher,” said Zaner Ag Hedge analyst Ted Seifried.
“We are getting into that time of year where more expensive cuts are going to go, (making) bigger profit margins. And it’s that time of year where we see demand pick up, going into the holiday season,” he added.
Chicago Mercantile Exchange December live cattle settled up 2.975 cents at 127.300 cents per pound while February cattle finished up 3.000 cent at a contract high 131.750 cents.
Trading limits in cattle will expand to 4.500 cents on Monday after the limit-up move, CME Group said on its website.
CME January feeder cattle were up 3.300 cents to 161.525 cents per pound.
Choice-grade wholesale beef prices were 49 cents higher at $208.74 per cwt, highest since July, according to U.S. Department of Agriculture data.
Lean hog futures were mostly lower for the third straight session as prices continued to ease from multi-month highs reached on Tuesday.
Abundant supplies and weaker cash prices weighed on hogs while some spread traders bought cattle and sold hogs.
CME December hog futures were down 0.700 cent to 65.100 cents per pound and February hogs off 0.075 cent at 71.975 cents.
Hogs in the top cash market in Iowa and Minnesota were down $1.45 to $61.86 per cwt.