CHICAGO, Feb 23 (Reuters) – Chicago Mercantile Exchange live cattle contracts closed higher on Tuesday following a steep rise in wholesale beef values that could help underpin cash prices later this week, traders said.
February closed 0.525 cent per lb higher at 136.950 cents, and April ended at 135.500 cents, up 0.875 cent.
The morning’s wholesale choice beef price climbed $2.19 per cwt from Monday to $215.47. Select cuts jumped $2.69 to $212.49, the U.S. Department of Agriculture said.
“We’re getting down to the nitty gritty,” said JRS Consulting owner Jack Salzsieder. Retailers are considering buying product to feature after Easter and for spring grilling, he said.
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Current futures prices, improved wholesale beef demand and fewer cattle for sale point to steady to better prices for market-ready, or cash cattle, than last week, said traders and analysts.
A week ago, packers paid $133 to $134 per cwt for cash cattle.
Tuesday’s average beef packer margin was a negative $41.10 per head, down from a negative $31.15 on Monday and negative $37.70 a week ago, as calculated by HedgersEdge.com.
USDA will issue the monthly cold storage report on Tuesday at 2 p.m. CST (2000 GMT) that will include January beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 516.1 million lbs, and pork at 608.1 million lbs.
Strong cash feeder cattle prices and weaker corn futures boosted CME feeder cattle contracts. March closed 1.850 cents per lb higher at 157.025.
CME lean hogs gained in anticipation of tighter spring supplies and firm wholesale pork values with some packers scheduled to curb production, traders said.
April closed up 0.700 cent per lb to 69.950 cents, and thinly traded May finished up 0.275 cent per lb to 76.300 cents.
The morning’s wholesale pork price was 85 cents per cwt higher than on Monday at $76.48, the USDA said.
Fund buying and live cattle market advances contributed to lean hog futures gains in the face of soft cash prices, traders and analysts said.
Cash hogs in the U.S. Midwest on Tuesday morning traded steady to weak, with at least one packing plant expected to be closed on Thursday for scheduled maintenance, said dealers.
