CHICAGO, Dec 10 (Reuters) – Chicago Mercantile Exchange live cattle contracts closed higher on Thursday, driven by short-covering that gradually gave way to this week’s lower cash prices and lackluster wholesale beef demand, traders said.
Spot December closed 1.700 cents per lb higher at 121.550 cents, and February up 2.375 cents to 126.525.
“It’s just a flurry with nothing to sustain it, so we’re not expecting it to continue,” Archer Financial Services broker Dennis Smith said regarding the day’s advances.
This week, packers paid mostly $118 to $121 per cwt for market-ready, or cash, cattle that last week bought $124 to $126, feedlot sources said.
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Thursday morning’s wholesale choice beef price gained 11 cents per cwt from Wednesday to $203.19. Select cuts were up 8 cents to $190.08, based on U.S. Department of Agriculture data.
Processors are looking ahead to the first full week of production after booking enough cattle for delivery during plant shutdowns over the Christmas and New Year’s holiday, said traders and analysts.
Overall meat demand in the coming weeks will at times struggle with consumer budgets geared toward holiday spending, they said.
CME feeder cattle followed live cattle futures higher, with January ending 2.425 cents per lb higher at 153.050.
CME lean hogs closed down slightly after investors sold December, which will expire on Dec. 14, and simultaneously bought deferred months, traders said.
December also moved in tandem with the exchange’s hog index for Dec. 8 at 56.66 cents.
Spot December closed 0.525 cent per lb lower at 56.225 cents, and February down 0.025 cent to 59.225 cents.
Conflicting market fundamentals kept investors on the defensive for most of the session.
USDA data showed cash hogs in Iowa/Minnesota Thursday morning, on average, sold at $52.30 per cwt, down 14 cents per cwt from Wednesday.
Thursday morning’s wholesale pork price of $73.71 per cwt was $1.05 higher than on Wednesday, helped by the nearly $3 rise in ham and pork belly values, the USDA said.
Processors likely wrapped up purchases for the roughly 230,000-head estimated Saturday kill, a hog dealer said.
“Maybe packers are still trying to sell hams for Christmas, and processors and bacon slicers are putting pork bellies in freezers for next spring and summer,” he added.
