CHICAGO, June 14 (Reuters) – Chicago Mercantile Exchange live cattle futures closed mostly higher on Tuesday, driven by short-covering after contracts settled down their 3.000-cents per lb daily price limit on Monday, traders said.
CME’s live cattle futures will return to the normal 3.000-cents limit on Wednesday after failing to settle at the expanded limit of 4.5-cents on Tuesday.
June live cattle closed down 0.400 cent per lb to 119.050 cents. August ended up 0.650 cents to 115.000 cents, and October 1.050 cents higher at 114.850 cents.
Some investors also bought deferred contracts and simultaneously sold June futures in anticipation of possible weak cash prices by Friday.
Read Also
U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
Last week, packers in the U.S. Plains paid $128 to $129.50 per cwt for market-ready, or cash, cattle that the week before brought $128 to $132.50.
There are 49,000 more cattle for sale than last week and the market appears to be factoring in bigger cattle numbers ahead, a trader said.
June futures lagged despite profitable packer margins and firm wholesale beef values.
Beef packer margins for Tuesday, on average, were a positive $63.20 per head, down from a positive $67.80 on Monday and up from a positive $51.90 a week ago, as calculated by HedgersEdge.com.
The morning’s choice beef price was at $227.95 per cwt, up 39 cents from Monday. Select cuts rose 64 cents to $202.63, the U.S. Department of Agriculture said.
“With beef where it is I think there’s a chance we see retailers in the next few days start to look ahead for the Fourth of July holiday,” said Agrivisor Services analyst Dale Durchholz.
Short-covering and back-month live cattle buying boosted CME feeder cattle. Feeder cattle’s expanded 6.750-cents limit will return to the normal 4.5-cent limit on Wednesday.
August feeders closed 1.100 cents per lb higher at 142.150 cents.
CME lean hogs settled sharply higher fueled by weather concerns and escalating corn prices, traders said.
Summer hog contracts hit new highs stirred by worries that hot weather during that period might hurt production by slowing down animal weight gains, a trader said.
He said rising corn prices may also prompt farmers to feed animals to lighter weight and limit herd expansion.
Thinly-traded June, which expired at noon CDT (1700 GMT), closed down 0.150 cent per lb to 81.675 cents.
Most-active July ended 1.975 cents higher at 88.075 cents, and August closed 1.500 cents higher at 89.325 cents.
