CHICAGO, Sept 25 (Reuters) – Chicago Mercantile Exchange live cattle futures on Friday closed up their 3.0-cents per lb daily price limit, ignited by active short-covering and bargain hunting after contracts recently tumbled to two-year lows, traders said.
Spot-October and December finished at 133.700 and 137.000 cents per lb, respectively.
Live cattle’s trading limit will be expanded to 4.5 cents on Monday following Friday’s limit-up settlement.
“The market was dramatically oversold, but it’s been that way all week,” said Oak Investment Group president Joe Ocrant.
Futures rallied despite unrelenting bearish fundamentals.
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Friday morning’s wholesale choice beef price fell $1.40 to $213.45 per cwt from Thursday. Select cuts slid 94 cents to $210.68, the U.S. Department of Agriculture said.
This week, packers paid $128 to $130 per cwt for market-ready, or cash cattle, that was down as much as $6 than last week, feedlot sources said.
Heavyweight cattle dragged on cash values and prices for wholesale beef, which also encountered competition from cheaper pork, traders and analysts said.
CME feeder cattle finished up their 4.5-cent per lb price limit, following live cattle future’s limit-up move. Feeder cattle trading limits will be expanded to 6.750 cents on Monday.
Feeder cattle futures also benefited from their discounts to the exchange’s feeder cattle index for Sept. 23 at 195.75 cents.
October ended at 184.600 cents per lb.
HOGS MOSTLY WEAK AHEAD OF REPORT
CME lean hogs settled mostly weak after traders tweaked positions before the government’s quarterly hog report on Friday at 2 p.m. CDT (1900 GMT).
Analysts said herd expansion likely slowed during the June-August quarter compared to last year after lower cash prices hurt profits for farmers.
Spot-October hogs closed up 0.225 cent per lb at 71.875 cents, December down 0.050 cent to 65.775 cents and February ended 0.725 cent lower at 68.950.
The morning’s lower cash prices limited futures gains, while strong wholesale pork values offered downside support, traders said.
USDA quoted Friday morning’s average cash price in the western Midwest at $69.16 per cwt, down 83 cents from Thursday.
The wholesale pork price on Friday morning was at $84.29 per cwt, $1.87 higher than on Thursday, with all cuts gaining in value except picnic shoulders, USDA said.
Some packers trimmed cash bids after wrapping up near-term supply needs, traders said.
Grocers are buying pork hand-to-mouth after buying most of what they need for National Pork Month in October, they said.
