U.S. livestock: CME live cattle snap back ahead of holiday

Chicago | Reuters –– Chicago Mercantile Exchange live cattle contracts ended up sharply on Monday, driven by active short-covering as some investors prepare for Thanksgiving holiday vacations, traders said.

“Some of these guys are so frustrated with market volatility and uncertainty that they’re looking forward to some time off,” a trader said.

Spot December finished 2.475 cents/lb. higher at 132.175 cents, and February closed up 2.175 cents, to 134.2 (all figures US$).

December and February broke through their respective 10-day moving averages of 130.12 and 132.25 cents, which triggered fund buying and buy stops.

Some participants bought December and simultaneously sold deferred months with the view that packers might need cattle for the first full week of production after the holiday.

And there are thoughts that last weekend’s wintry weather in parts of the U.S. Plains slowed down animal weight gains, which could later support cash and wholesale beef values.

Last week, market-ready (cash) cattle in the U.S. Plains brought $123-$127/cwt versus $126-$129 the week before.

Monday morning’s wholesale choice beef price was up 18 cents/cwt from Friday, to $203.32. Select cuts slipped 23 cents, to $190.72, the U.S. Department of Agriculture said.

USDA will issue the monthly cold storage survey on Monday at 2 p.m. CT, which will include beef and pork stocks during October.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 504 million lbs., and pork at 655.6 million.

Live cattle future’s buying and steady-to-higher cash feeder cattle prices lifted CME feeder cattle contracts. January ended 1.75 cents/lb. higher at 165.4.

Flat-weak hog futures settlement

Cash price uncertainty and soft wholesale pork values, amid abundant supplies, stirred profit-taking that pulled CME lean hogs down from morning tops, traders said.

Spot December finished unchanged at 57.45 cents, February ended down 0.05 cent, to 58.275 cents, and April 0.375 cent lower at 63.150 cents.

Monday morning’s wholesale pork price had dropped 38 cents/cwt from Friday to $72.76, USDA said.

Separate government data showed cash hog prices in the western Midwest market on Monday morning declined 31 cents/cwt from Friday to $51.15.

However, regional hog dealers and analysts said profitable margins encouraged some processors to maintain at least steady cash bids, or raise them, to accommodate the first full post-holiday slaughter.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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