CHICAGO, May 27 (Reuters) – U.S. live cattle gained for the second straight session on Friday, rising on technical buying and hopes meat demand would increase during the summer grilling season, traders said.
Investors also were exiting short positions in light trading volumes ahead of the three-day holiday weekend surrounding Monday’s U.S. Memorial day holiday, considered the unofficial start of the grilling season.
Prices for wholesale beef and pork declined going into the weekend, as many retailers had already bought what they needed for holiday-related demand.
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However, bullish cattle traders were optimistic of better consumer and retailer demand as temperatures warm and consumers fire up backyard grills.
Most-active Chicago Mercantile August cattle settled 1.075 cents higher at 116.425 cents per lb., nearly filling a chart gap created when prices opened on Monday at 115.300 cents, below the May 20 session low of 116.725 cents. Due in part to that steep drop on Monday, cattle eased 0.9 percent for the week, despite gaining the past three days.
“They tried to fill the start-of-the-week gap,” analyst Domenic Varricchio, of the brokerage Schwieterman Inc, said of technical traders.
Feeder cattle for August delivery finished 1.300 cents higher at 146.700 cents per lb., trimming losses but still shedding about 1 percent for the week.
Lean hogs were narrowly mixed, with some contracts reversing from losses earlier in the session to turn higher in bear-spreading as investors bought deferred contracts and sold nearby positions.
Most-active July hogs settled 0.200 cent lower at 81.075 cents per lb, gaining 1.1 percent for the week.
“Cash hogs are mostly $1 lower in Illinois ahead of the holiday-shortened slaughter schedule, while mostly steady elsewhere. (Pork) product prices are weaker as well. The combination led to softer trade in lean hog futures as we consolidate into the weekend,” INTL FCStone analyst Arlan Suderman said in a note to clients.
