Chicago Mercantile Exchange (CME) live cattle futures on Thursday stretched gains into a third straight session in anticipation of steady-to-higher cash cattle prices, traders and analysts said.
June future’s discount to last week’s cash cattle returns and this week’s cash expectations attracted buyers.
CME April and June live cattle cleared their respective 40-day moving averages of 127.15 cents and 122.37 cents, igniting fund buying and buy stops (all figures US$).
Spot April live cattle closed up 0.675 cent per pound to 127.6 cents. Most-actively traded June ended at 122.9 cents, 0.825 cent higher.
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“I see no reason why we can’t see at least a $127 and possibly $128 per hundredweight (cwt) cattle trade. The cutout is holding up, futures are higher and packers are short-bought cattle,” a trader said.
Cash cattle bids in Texas and Kansas stood at $123 to $124/cwt against $128 asking prices, feedlot sources said. Cash cattle last week traded at mostly $126.
The U.S. Department of Agriculture on Thursday morning quoted the average wholesale choice beef price, or cutout, at $191.75/cwt, up 21 cents from Wednesday; select cuts gained 29 cents to $185.10.
U.S. beef packer margins on Thursday were estimated at a negative $33.55 per head versus a negative $37.50 on Wednesday
and a negative $38 a week ago, according to HedgersEdge.com.
CME spot April feeder cattle, which expired at noon CT, settled at 134.025 cents/lb., up 0.275 cents.
The exchange’s feeder cattle index at 132.48 cents was at a discount to spot-April, which limited its advances.
Remaining CME feeder cattle contracts followed the live cattle market higher, he said.
May closed at 142.2 cents, up 1.1 cents. And August finished 1.525 cents higher at 152.15 cents.
Hogs up with cash, pork prices
CME hogs marked a three-day win streak led by firmer cash hog prices and sharply higher wholesale pork values, according to analysts and traders.
“Warmer weather is fast approaching and that’s probably got packers and grocers excited about moving product for grilling,” a trader said.
Thursday morning’s government data showed the average hog price in the most-watched Iowa/Minnesota market jumped $2/cwt from Wednesday to $82.51.
USDA’s Thursday morning mandatory wholesale pork price, calculated on a plant-delivered basis, was $87.57/cwt, $2.13 higher than on Wednesday.
U.S. pork packer margins on Thursday were estimated at a positive $8.50 per head versus a positive $11 on Wednesday and a positive $6.05 a week ago, according to HedgersEdge.com.
CME June hogs settled up 0.825 cent at 91.825 cents/lb. July hogs closed at 92.025 cents, up 0.6 cent.
— Theopolis Waters writes for Reuters from Chicago.
