By Theopolis Waters
CHICAGO, Nov 14 (Reuters) – Chicago Mercantile Exchange live cattle futures gained modestly on Friday while anticipating strong prices for market-ready or cash cattle this week, traders said.
December closed 0.550 cents per pound higher at 170.200 cents, and February at 171.275 cents up 0.250 cents.
Processors are buying cattle for next week, the last full kill week before the Thanksgiving holiday.
Packers who are short bought and this week’s futures’ surge emboldened feedlots to take no less than $171 per hundredweight (cwt) for their animals, traders and analysts said.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Cash cattle bids in the northern U.S. Plains were at $170 per cwt, compared to last week’s sales of mostly $167.
Expectations for better cash returns stirred bull spreads, a trading strategy that consisted of traders who bought the December contract and simultaneously sold February.
“I would not be surprised if the market took a breather come Monday after this week’s cattle sales,” a trader said.
CME feeder cattle rose on buy stops and live cattle market advances.
November closed up 0.650 cent per lb at 240.000 cents per lb., and January 1.900 cents higher at 236.125 cents.
HOG FUTURES RISE AGAIN
CME lean hogs gained for a seventh straight session with support from fund buying and buy stops, traders said.
December closed up 1.400 cents per lb at 92.675 cents, and broke through the 40-day moving average of 91.70 cents. February ended 1.150 cents higher at 92.750 cents.
CME hogs made headway despite lackluster cash prices and modest pork cutout gains.
Friday morning’s average hog price in the eastern Midwest was down 25 cents per cwt. from Thursday at $84.06, the U.S. Department of Agriculture said.
Separate USDA data showed the morning’s wholesale pork price was up 34 cents per cwt from Thursday to $96.58.
A few packers needed hogs for Saturday’s estimated 132,000-head slaughter to make up for Veterans Day plant closures and delayed delivery of pigs due to early wintry weather.
Other processors are banking on more hogs coming to market as farmers try to beat potentially lower prices before plants shutdown for American Thanksgiving.
