CHICAGO, Oct 22 (Reuters) – Chicago Mercantile Exchange live cattle futures gained on Thursday in anticipation of an increase in prices for market-ready, or cash, cattle by Friday, traders said.
Investors adjusted positions before Friday’s U.S. Department of Agriculture monthly Cattle-On-Feed report.
USDA will issue the monthly cold storage report on Thursday at 2 p.m. CDT (1900 GMT), which will include September beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 486.9 mln lbs, and pork at 683.8 mln lbs.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
So far, packers in Texas and Kansas have bid $136 to $137 per cwt for cash cattle versus up to $145 asking prices, feedlot sources said. Last week, most cash cattle in the U.S. Plains moved at $134 to $137.
“Another round of higher cash is likely, but less profits and a couple of days of mixed cutout prices are now issues for packers,” a trader said.
Thursday morning’s wholesale choice beef price, or cutout, climbed $1.53 per cwt from Wednesday to $218.02. Select cuts were down 26 cents to $209.73, USDA said.
The average beef packer margin for Thursday was $18.30 per head, down from $26.05 on Wednesday and $87.60 a week ago, as calculated by HedgersEdge.com.
Spot October closed 0.450 cent per lb higher at 140.425, and December up 0.600 cent to 143.750.
CME feeder cattle futures drew strength from soft corn futures and active back-month live cattle market buying.
October feeder cattle ended 1.300 cents per lb higher at 195.550 cents.
HOG FUTURES END LOWER
The morning’s drop in cash and wholesale pork prices undercut CME lean hogs, traders said.
December and February ended 0.575 cent per lb lower at 66.450 and 68.125 cents, respectively.
Thursday morning’s wholesale pork price fell $1.14 from Wednesday to $88.50 per cwt, following the nearly $4 slump in ham costs, according to USDA.
Separate government data showed the morning’s cash hog prices in the Iowa/Minnesota at $69.98, 79 cents per cwt lower than on Wednesday.
Packer inventories are close to being full for this week, and pork sales slowed after retailers bought almost all they need for the remainder of October Pork Month, traders and analysts said.
“Hams should get a bid under them as we get closer to Thanksgiving, but I am uncertain how the rest of the cuts are going to perform,” said independent livestock futures trader Dan Norcini.
