CHICAGO, Oct 16 (Reuters) – Chicago Mercantile Exchange live cattle futures climbed sharply on Friday, with October settling up the 3-cents per lb daily price limit, ignited by short-covering after initial cash prices beat expectations.
Spot October closed at 135.950 cents per lb and December rose 2.875 cents to 139.425.
Live cattle’s trading limit will be expanded to 4.5 cents on Monday following the October contract’s limit-up settlement.
On afternoon, market-ready, or cash, cattle in Texas brought $134 per cwt, up $7 from last week there, feed lot sources said. Feed lots elsewhere in the Plains are passing up bids of $134 to $135, they said.
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Last week, cash cattle in the U.S. Plains sold at mostly $126 to $127.
“Feed lots are determined to hold back cattle after prices last surged almost $10 per cwt,” a Kansas feed yard manager said.
Futures’ rally and profitable packer margins further emboldened cattle sellers, although wholesale beef prices bear watching, traders and analysts said.
Friday morning’s wholesale choice beef price, or cutout, was down a penny from Thursday to $211.21 per cwt. Select cuts dropped $1.06 to $206.17, the U.S. Department of Agriculture said.
The average beef packer margin for Friday was $83.35 per head, down from $87.60 on Thursday and $106.90 a week ago, as calculated by HedgersEdge.com.
Fund buying contributed to October and December advances after both months surpassed their respective 40-day moving average of 135.80 and 139.48 cents.
CME October feeder cattle ended 4.025 cents per lb higher at 193.800 cents, strengthened by live cattle futures’ buying.
HOG CONTRACTS END LOWER
Technical selling and weaker cash prices pressured CME lean hogs, traders said.
December finished 1.250 cents per lb lower at 65.575 cents, and February down 0.675 cent to 68.450 cents.
USDA quoted the morning’s average cash hog price in Iowa/Minnesota at $71.29 per cwt, $1.98 lower than on Thursday.
Packer inventories are full for Saturday’s estimated 192,000-head kill and early next week’s production, hog dealers said.
The pork cutout price broke its three-day slide after grocers purchased product for immediate needs during the second half of October Pork Month, traders and analysts said.
USDA reported the morning wholesale pork price at $89.24 per cwt, $1.42 higher than on Thursday, helped by the more than $3 jump in costs for pork bellies.
