Chicago | Reuters — Chicago Mercantile Exchange cattle futures rose on Wednesday, led higher by a bargain buying bounce in the feeder cattle contracts.
The feeder cattle market, which jumped 1.4 per cent on Wednesday, was sharply oversold after the front-month contract hit its lowest since May 24 on Tuesday, traders said.
“The feeder market has been a little bit more undervalued so it is a little bit easier to pop that market,” said Craig VanDyke, senior risk manager at Top Third Ag Marketing. “It was the path of least resistance today.”
There were reports of improving cash values for feeder cattle, which provided additional strength, VanDyke said.
CME March feeder cattle was 1.95 cents higher at 143.45 cents/lb. (all figures US$). The contract bottomed out at its lowest since Dec. 7 during the session.
CME February live cattle finished 0.425 cents higher at 125.55 cents/lb. and most-active April cattle ended up 0.425 cent at 126.5 cents.
Hog futures were weaker, with traders waiting for concrete signs of a pick-up in demand from China before pushing values higher.
The market was expecting a bump in purchases from China due to African swine fever causing farmers in that country to liquidate their herds. China’s pork output fell 0.9 per cent in 2018.
CME February lean hogs ended down 0.7 cent at 60.775 cents/lb. Most-active April hog futures dropped 1.25 cents to 64.85 cents.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.