Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures notched gains for a fifth consecutive session on Thursday, fuelled by the recent rise in wholesale beef prices in anticipation of tight near-term supplies, traders said.
CME livestock futures closed at noon CT in observance of the Christmas holiday.
Spot December settled 2.5 cents/lb. higher at 131.1 cents, and February rose 2.35 cents, to 137.025 cents (all figures US$).
Thursday morning’s wholesale choice beef price rose $2.41/cwt from Wednesday, to $197.31. Select cuts climbed $2.55, to $190.05, based on U.S. Department of Agriculture data.
Retailers bought beef early on fears that weekend winter weather in the southern Plains might make it difficult for employees and livestock to reach packing plants, traders said.
They said plants closed during the Christmas and New Year’s holidays could further constrict beef supplies, which again might encourage packers to spend more for cattle.
This week, market-ready, or cash, cattle in the U.S. Plains brought $122-$124/cwt, up from $114-$118 last week, feedlot sources said.
CME feeder cattle drew support from live cattle futures buying, but pressured by profit-taking following their four-day winning streak.
January feeders ended up 0.4 cent at 163.475 cents, and March down 0.15 cent at 160.125.
Report boosts hog futures
CME lean hogs fed off Wednesday’s bullish USDA quarterly hog report. The data suggests fewer than expected animals this spring.
“The report was a Christmas gift for the industry. I think it’s going to be a lot different attitude, cash price-wise, once we get past New Year’s,” an Indiana dealer said.
Spot February settled up 0.525 cent/lb. at 58.3 cents, and April 1.4 cents higher at 65.075 cents.
Cash hogs in the Midwest on Thursday morning traded mostly steady to $1 per cwt higher, regional buyers said.
One buyer said a packer may have adjusted prices for its pigs to reflect current values, and that the recent lower price trend will continue.
Others noted that processors raised cash bids in anticipation that supplies would dwindle after packers reduce operations during the holidays.
Dealers and futures traders are monitoring wholesale pork values, at a time when most retailers have wrapped up holiday meat purchases.
The morning’s wholesale pork price was up 63 cents/cwt from Wednesday to $69.49, after the more than $6 hike in costs for picnic shoulders, USDA said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.