By Theopolis Waters
CHICAGO, June 26 (Reuters) – Chicago Mercantile Exchange live cattle futures on Thursday hit their highest level ever in anticipation of strong prices for market-ready, or cash, cattle led by record-high beef values, traders said.
“Retail beef demand has been on a tear while feeding the bulls in the cattle pit, increasing packer margins and causing feedlots to hold out for more money,” a trader said.
Last week, cash cattle in Texas and Kansas fetched $150 per hundredweight (cwt), and $148 to $150 in Nebraska.
Read Also
U.S. livestock: Cattle futures end lower in profit-taking, technical correction
Chicago Mercantile Exchange cattle futures declined for a second straight session on Wednesday in a profit-taking and technical-selling correction from recent highs.
The morning wholesale price for choice beef rose $1.26 per cwt from Wednesday to $245.78, surpassing Tuesday’s record, according to U.S. Department of Agriculture data.
Beef packer margins for Thursday were at positive $103.88 per head, compared with a positive $99.14 on Wednesday and a positive $68.10 a week ago, as calculated by industry analytics firm HedgersEdge.com.
August live cattle led advances after traders simultaneously bought that month and sold the June contract that will expire on Monday.
CME live cattle drew more support from fund buying and feeder cattle futures’ record-setting pace.
On Friday, some investors may pocket profits before Monday, the last trading day for the month and end of the quarter, a trader said.
June live cattle finished 1.800 cents per pound higher at 153.750 cents, and August ended up 2.100 cents at 152.750 cents.
CME feeder cattle hit a new high, with front-months up the 3-cent maximum price limit, helped by higher live cattle futures and fund buying.
August and September closed up 3.000 cents per lb to 215.125 and 216.900 cents, respectively.
HOGS UP WITH PORK PRICES
Nearby CME hog contracts closed higher, supported by an all-time pork prices record amid tight supplies and supermarket demand for July 4 holiday cookouts, traders said.
Thursday morning’s wholesale pork price rose $1.48 per cwt from Wednesday to $135.15, topping Tuesday’s record, said USDA.
The morning’s steady to $2 per cwt higher prices for slaughter-ready, or cash hogs, in the Midwest provided more market support.
Packers spent more for hogs given profitable margins, fewer animals and brisk wholesale pork demand.
However, packing plants will be closed at least one day next week for the holiday, which might pressure cash hog bids. And, meat demand could fade until retailers gauge how much meat moved over the holiday weekend.
Trepidation before Friday’s government quarterly hog report sank deferred contracts.
Analysts expect Friday’s data to show the pig virus hurt U.S. hog supplies while fueling herd expansion due to high hog prices and cheaper feed costs.
July hogs closed up 0.550 cent per lb to 129.850, and August finished up 0.150 cent at 128.800 cents.
