CHICAGO, Aug 28 (Reuters) – Chicago Mercantile Exchange live cattle futures closed higher for a second straight session on Friday in anticipation of this week’s cash prices, traders said.
Spot-August futures, which will expire on Monday, ended 1.875 cents per lb higher at 146.525 cents, and October up 1.425 cents at 143.975 cents.
“Feedyards and packers waited for futures to close before making their move,” said a trader who predicted market-ready, or cash, sales of $146 to $147 per cwt.
Early on Friday, processors in Kansas and Texas raised cash bids to $145 from $144 as sellers held out for at least $147, feedlot sources said. Last week, cash cattle in the U.S. Plains sold at $147 to $149.
Read Also
Canadian Pork Council meets with U.S. and Mexican counterparts
Leaders of the North American pork sector reaffirmed their commitment to producing nutritious, sustainable and affordable pork at a recent trilateral meeting held in Niagara on the Lake, Ont.
Packers may try to conserve their profitable margins by cutting kills while drawing from significant numbers of cattle they bought last week, said traders and analysts.
Also, processors may balk at spending more for cattle as pricey beef is challenged by plentiful more-affordable pork and chicken for Labor Day holiday barbecues, he said.
Friday morning’s wholesale choice beef price dropped 58 cents to $243.63 per cwt from Thursday. Select cuts were down 29 cents to $232.83, the U.S. Department of Agriculture said.
October and December earlier pierced their respective 10-day moving average resistance levels of 144.15 and 146.23 cents, which triggered buy stops and fund buying.
Technical buying and live cattle futures advances drove up CME feeder cattle contracts, with September closing 2.050 cents higher at 202.400 cents.
FLAT-LOWER HOG FUTURES CLOSE
CME lean hogs were pressured by weaker cash prices, but futures’ discounts to the exchange’s hog index for Aug. 26 at 78.68 cents underpinned the December contract, traders said.
Spot-October contract closed 0.625 cent per lb lower at 66.425 cents, December unchanged at 62.050 cents and February ended down 0.250 cent at 66.175.
USDA reported the morning’s western Midwest average cash hog price at $70.34 per cwt in light volume, $2.77 lower than on Thursday.
Farmers who sent hogs to packing plants ahead of schedule, with lower prices in mind as the Labor Day holiday approaches, have exacerbated already ample supplies, a trader said.
Pork demand held up reasonably well considering the increased hog numbers, he said.
Friday morning’s wholesale pork price was at $85.27 per cwt, up 58 cents from Thursday, led by the bounce in ribs and pork bellies, based on USDA data.
