Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose about one per cent on Wednesday, rebounding from declines in the previous session on the back of higher cash cattle trades in the southern U.S. Plains, traders and analysts said.
Beef packers paid higher values for cattle to take advantage of big profit margins that were tied to rising wholesale beef prices. Cattle in Kansas fetched $128/cwt, up $3 from a week ago, feedlot sources said (all figures US$).
At the weekly online Fed Cattle Exchange, cattle sold for an average price of $128.39/cwt, compared with $123.69 last week, according to the exchange website.
“It looks like the packer has a market for the beef and can’t quite buy enough cattle to cover the beef sales. Not clear if that is export demand or domestic retail, but the bid is there,” said Alan Brugler, president of Brugler Marketing and Management.
CME April live cattle settled up 1.375 cents at 117.7 cents/lb. CME April feeder cattle also gained 1.375 cents, to 129.225 cents per pound, the highest settlement since Jan. 26.
The U.S. Department of Agriculture said choice-grade wholesale beef climbed to the highest levels since June, gaining $1.18, to $221.32/cwt.
Wholesale pork prices eased 58 cents to $82.18 per cwt, USDA said in a report released after the close of futures trading.
Beef packer profit margins were $125.25 per head, up from $50.85 a week ago, according to consultancy HedgersEdge.com. Pork packer profits were calculated at $26.60 per head, up from $22.55 a week ago.
Hogs in the Iowa and southern Minnesota cash market were up 98 cents, to $67.54/cwt, USDA said.
CME April lean hog futures finished 0.75 cent lower at 70.075 cents/lb., easing on profit-taking after Tuesday’s three-week high of 70.825 cents. Hogs also were pressured by earlier losses in cash hog prices, Brugler said.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.