Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Tuesday marked three days of gains, supported by their discounts to last week’s prices for market-ready, or cash, cattle, traders said.
June live cattle closed 0.575 cent/lb. higher at 116.375 cents, and August ended up 0.625 cent at 114.35 cents (all figures US$).
Cash cattle in the U.S. Plains last week brought $124/cwt. Investors are expecting similar prices later this week given tighter but still profitable packer margins and considerably fewer animals for sale than last week.
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Traders also look for beef cutout values to stabilize after falling four days in a row to levels that might generate retail buying interest.
Tuesday morning’s wholesale choice beef price, or cutout, dropped $1.54/cwt from Monday to $208.23. Select cuts were $1.04 higher at $201, the U.S. Department of Agriculture said.
Tuesday’s average beef packer margin was estimated at a positive $30.35 per head, down from a positive $31.75 on Monday and a positive $60.75 a week ago, as calculated by HedgersEdge.com.
Technical buying and further live cattle market advances pulled up CME feeder cattle futures. May finished 1.975 cents/lb. higher at 143.4 cents.
More hog market gains
Seasonally tight supplies fuelled a nearly two-week cash price rally, helping to extend CME lean hog’s winning streak on Tuesday to five consecutive sessions, traders said.
They said profit-taking and futures’ premiums to the exchange’s hog index for April 29 at 71.11 cents capped market advances.
Thinly traded May ended up 0.05 cent/lb. to 78.475 cents, and most-active June closed 0.225 cent higher at 82.925 cents.
Government data on Tuesday showed the morning average cash hog price in Iowa/Minnesota at $69.92, up 17 cents from Monday.
“I think the pigs packers are rounding up for Saturday supported the cash market today,” a Midwest hog dealer said.
Dealers forecasted a roughly 75,000-head Saturday slaughter, which will include a packing plant making up down time after it closed two days last week for equipment upgrades.
USDA estimated last Saturday’s hog slaughter at 60,000 head.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
