U.S. livestock: Funds, bargain buying rally live cattle

Chicago | Reuters — Chicago Mercantile Exchange live cattle on Thursday reversed some of their recent losses, stirred by fund buying and bargain hunting as the U.S. Memorial Day holiday approaches, said traders.

They said futures’ discounts to this week’s cash prices attracted would-be buyers.

June closed 1.8 cents/lb. higher at 123.925 cents, and above the 10-day moving average of 123.14 cents (all figures US$). August closed 1.475 cents higher at 121.4 cents, and above the 20-day moving average of 120.859 cents.

A significant number of lighter weight cattle are available, which is supportive for cash and wholesale beef prices, said independent livestock futures trader Dan Norcini.

“And, the discount between cash and futures is too steep given the light-weight or unfinished cattle that are out there,” he said.

This week packers paid mostly $132/cwt for market-ready, or cash, cattle in the U.S. Plains versus $133 to $134 last week.

Thursday afternoon’s average wholesale beef price was up three cents per hundredweight to $246.11 from Wednesday. Select cuts dropped 62 cents, to $218.98, the U.S. Department of Agriculture said.

Packers need fewer cattle while preparing to close plants on Monday’s holiday.

Retailer resisted buying large amounts of meat until they can gauge product movement over the holiday.

Market participants adjusted positions before USDA’s monthly Cattle on Feed report on Friday.

Technical buying and live cattle futures’ rebound boosted CME feeder cattle nearly two per cent.

May feeders, which expired at noon CT, settled down 0.475 cent at 143.55 cents and near CME’s feeder cattle index for May 24 at 143.09 cents.

Most actively traded August ended 2.45 cents higher at 151.125 cents, and September 2.15 cents higher at 150.975 cents.

Higher hog futures close

Strong cash hog and wholesale pork prices sent CME lean hogs higher, with some months reaching new highs, said traders.

June closed up 0.75 cent/lb. to 80.95 cents, and posted a fresh high of 81.075 cents. July finished 0.725 cent higher at 80.575 cents.

Thursday afternoon’s average cash hog price in Iowa/Minnesota was at $71.67/cwt, $1.56 higher than on Wednesday, USDA said.

U.S. government data on Thursday afternoon showed the average wholesale pork price up 44 cents/cwt from Wednesday to $90.30.

“Beef prices are higher, but pork in comparison remains cheap. And with the margins that packers are making, they can afford to pay up for hogs,” said Norcini.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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