CHICAGO, Aug 13 (Reuters) – Chicago Mercantile Exchange live cattle futures hit a six-month high on Tuesday in anticipation of higher cash prices this week, traders and analysts said
There were no cash cattle bids or asking prices reported by feedlot sources as of Tuesday
Last week, cash cattle in Texas and Kansas moved at $121 per hundredweight (cwt), feedlot sources said. They said live-basis cattle in Nebraska traded at $123.50
Processors may be convinced to spend more for cattle, traders said, because fewer cattle are up for sale and since grocers are stocking up on beef ahead of Sept. 2 U.S. Labor Day holiday outdoor cookouts
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The U.S. Department of Agriculture on Tuesday afternoon quoted the wholesale price, or cutout, of choice beef at $190.32 per cwt, up 4 cents from Monday. Select cuts rose 45 cents to $183.30
Speculative futures traders bought deferred contracts with the view that cash cattle and beef values have forged a summer seasonal low
Spread traders bought October CME live cattle futures and sold the August contract that will expire on Aug. 30
August live cattle futures closed up 0.300 cent at 123.900 cents per lb and October settled at 128.075 cents, 0.675 cent higher
The drop in corn prices and firm live cattle futures pushed up CME feeder cattle
Traders also cited $3 to $5 per cwt higher prices for cash feeder cattle in the closely watched Oklahoma City market
August feeders closed at 153.850 cents, up 0.350 cent per lb, while September closed at 157.700 cents, 0.700 cent higher
HOGS UP WITH CASH
CME hog futures rose for a third day in a row, fueled by higher cash hog and wholesale pork values, analysts and traders said
The average hog price Tuesday afternoon at the closely watched Iowa/Minnesota market was at $99.75 per cwt, $1.26 higher than on Monday, according to the USDA
Government data reported the wholesale pork, or cutout, price on Tuesday afternoon at $104.31 per cwt, up 38 cents from Monday. The cutout was largely supported by grocer demand for ribs that are a grilling staple
Some processors hiked cash hog bids to secure supplies for the rest of this week’s production
Nearby hog futures’ discount to CME’s hog index, which was at 102.16 cents, encouraged buyers
Spot August hogs closed at 101.800 cents per lb, or up 0.400 cent. Most-actively traded October ended at 86.525 cents, up 0.325 cent.
