By Theopolis Waters
CHICAGO, Feb 26 (Reuters) – The lead Chicago Mercantile Exchange live cattle contract set a new high on Wednesday, driven by record-high cash prices and strong wholesale beef quotes, traders said.
Cash cattle in Texas and Kansas traded at $150 per hundredweight, surpassing the previous record of $146 to $147 in January, feedlot sources said. Cash cattle in Nebraska moved at $152, eclipsing last month’s $150 record, they said.
Last week, cash cattle in the U.S. Plains traded from $144 to $146.75.
“Just another product of tight supplies,” KIS Futures vice president Lane Broadbent said.
Read Also
Australia nears breakthrough canola deal with China, sources say
Canberra is close to an agreement with Beijing that would allow Australian suppliers to ship five trial canola cargoes to China, sources familiar with the matter said, a move towards ending a years-long freeze in the trade.
Prices for market-ready received an added boost from rising wholesale beef values and this week’s surge in futures to new highs.
Wednesday afternoon’s wholesale choice beef price jumped $2.45 per cwt from Tuesday to $218.95. Select cuts rose $2.69 to $216.67, based on U.S. Department of Agriculture data.
April futures benefited from fund buying and traders who simultaneously sold February and bought the April contract because of its discount to cash cattle returns.
February live cattle closed 2.200 cent per lb higher at 148.650 cents, and peaked at a fresh contract high of 149.450 cents in electronic trading.
April ended at 144.525 cents, 2.125 cents higher. It marked a fresh contract high of 145.350 cents.
CME feeder cattle, for a lead contract, mirrored live cattle futures’ climb to a new high.
March ended up 0.925 cent per lb higher at 172.000 cents, after hitting a new contract high of 172.525 cents.
April at 173.925 cents, 1.400 cents higher. It reached a fresh contract high of 174.425 cents.
HOGS UNEVEN AMID PROFIT TAKING
CME hogs settled mixed, supported by higher cash prices while pressured by profit taking, traders said.
The afternoon’s average price of hogs in the closely-watched Iowa/Minnesota market was $96.94 per cwt, up $1.80 from Tuesday.
Harsh weather in the western part of the Midwest delayed the delivery of hogs to packing plants, a trader said.
Remaining contracts sagged after traders, who had recently placed long bets, claimed profits in advance of the last trading day for the month of February on Friday.
Some traders bought breaks in the market with the view that the Porcine Epidemic Diarrhea virus (PEDv), which is fatal to piglets, will hurt hog supplies beginning this summer.
“Dips in hogs will continue to attract buying because of the PEDv issue,” said independent livestock futures trader Dan Norcini.
April hogs settled at 101.025 cents per lb, up 0.450 cents, after posting a new contract high of 101.650 cents.
June finished at 108.350 cents, 0.600 cent lower
