By Theopolis Waters
CHICAGO, Jan 21 (Reuters) – Chicago Mercantile Exchange live cattle futures settled up by their 3-cent per pound daily price limit on Thursday following a turnaround in crude oil prices that helped pare recent deep U.S. stock market losses.
February and April live cattle closed at 130.250 and 131.175 cents, respectively. Live cattle’s trading limit will be expanded to 4.5 cents on Friday.
The choppiness in live cattle futures, and other markets, is led by day-to-day “emotional” volatility tied to crude oil and equities, said AgriVisor Services analyst Dale Durchholz.
Meanwhile, cattle market participants expect market-ready, or cash, cattle to trade around $130 per hundredweight (cwt) by Friday based on $127 to $128 per cwt. packer bids versus $134 asking prices from sellers.
Last week, cash cattle in the U.S. Plains brought $132 to $134 per cwt.
Processors may curb cash spending to improve their margins while watching wholesale beef prices teeter on resuming their seasonal slide.
Thursday morning’s wholesale Choice beef price dropped $1.14 per cwt. from Wednesday to $228.81. Select cuts rose 90 cents to 225.04, the U.S. Department of Agriculture said.
Market participants await USDA’s monthly Cattle-On-Feed report on Friday.
The government will simultaneously issue the monthly cold storage survey that will include December beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 527.7 mln lbs, and pork at 568.0 mln lbs.
Live cattle future’s upswing pulled CME feeder cattle contracts higher. March feeders finished up the 4.5-cent per lb price limit that will be expanded to 6.750 cents on Friday.
January closed at 158.675 cents per lb, 3.675 cents higher. March ended limit-up at 154.225 cents.
HOG FUTURES END HIGHER
Firm cash prices and CME live cattle futures buying supported the exchange’s lean hog market, traders said.
Spot February finished up 1.025 cents per lb to 63.750 cents, and April ended 1.950 cents higher at 69.025 cents.
Cash hogs in the Midwest on Thursday morning traded as much as $1 per cwt higher amid seasonally tight supplies and highly profitable packer margins, regional hog dealers said.
“In general, there are still a lot of hogs out there. But farmers for the most part are current,” or on schedule sending animals to market, an Iowa dealer said.
Technical buying developed, especially after the May contract rolled through the 200-day moving average of 75.01 cents.
