U.S. livestock: Funds, weather extend CME live cattle gains

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Friday finished higher for the second day in a row, with help from fund buying and another wintry blast in parts of the U.S. Plains, said traders.

Bitter cold tends to slow cattle weight gains, while hazardous conditions disrupt movement of livestock to market.

February live cattle closed 0.425 cent/lb. higher at 126.85 cents (all figures US$). April settled up 0.2 cent at 126.125 cents.

CME live cattle will resume its normal three-cent-per-pound daily price limit on Monday after not settling up or down Friday’s 4.5-cent expanded limit.

Some funds that exited Friday’s stock market collapse may have landed in live cattle futures because of their upward momentum, said traders and analysts.

“It does look like there’s some new money flowing into the cattle market. It looks like maybe some are coming out of the stock market,” said Midwest Marketing Solutions analyst Brian Hoops.

Fundamentally, cattle futures traders await next week’s cash cattle trade that will be influenced by weather, wholesale beef demand and forecasts for increased supplies ahead.

Friday afternoon’s choice wholesale beef price dropped 50 cents/cwt from Thursday to $209.10. Select cuts fell $1.09 to $203.45, the U.S. Department of Agriculture said.

This week packers paid $125-$126/cwt for slaughter-ready, or cash, cattle that a week ago brought mostly $127.

Monday evening is the first notice day for live cattle deliveries against the February contract that will expire on Feb. 28.

Buy stops and live cattle futures gains lifted CME feeder cattle to a two-month top. The market’s 6.750-cent expanded limit on Friday will return to its usual 4.5-cent limit on Monday.

March feeders ended up 1.375 cents/lb. at 150.925 cents.

Hogs hit another high

CME lean hogs reached their highest level since late July 2016, after upward-trending cash prices lifted the market to a one-year high on Thursday.

Packers competed for market-ready hogs as snow and colder weather enters areas of the upper western Corn Belt, a trader said.

Processors may have to pay for more hogs to coax farmers into opening doors to swine barns that they would like to keep closed to retain heat, a trader said.

February lean hog futures closed 0.375 cent/lb. higher at 75.2 cents, and reached a new contract high of 75.4 cents. Most-active April finished up 0.725 cent at 73.55 cents.

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

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