Chicago | Reuters — Chicago Mercantile Exchange live cattle futures landed in positive territory for a third day in a row on Tuesday, driven by upward-trending wholesale beef values that may bode well for cash prices later this week, traders said.
Spot October closed 1.975 cents/lb. higher at 140.25, and December up 1.525 cents, to 143.175 (all figures US$).
Tuesday morning’s wholesale choice beef price, or cutout, gained $1.58/cwt from Monday to $215.22/cwt. Select cuts jumped $2.17, to $209.90, the U.S. Department of Agriculture said.
Beef cutout values increase as supermarkets prepare to feature product after October Pork Month, traders and analysts said.
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But, they said, grocers are not buying significant amounts of beef at current high prices.
Packers are expected pay more for market-ready, or cash, cattle than last week following futures’ three-day rally and improved beef sales outlook. Last week, cash cattle fetched $134 to $137/cwt.
Traders monitored beef packer margins that were weakened by last week’s steep cash price climb.
The average beef packer margin for Tuesday was $24.45 per head, down from $75.50 on Monday and $63.35 a week earlier, as calculated by HedgersEdge.com.
CME October feeder cattle ended down 0.125 cent/lb. to 194.875 cents, and November up 0.3 cent, to 192.45 cents.
Firm corn prices pressured October feeder cattle futures, with November supported by live cattle market buying and as much as $5/cwt higher cash feeder cattle prices.
Higher hog futures settlement
CME lean hogs drew support from their hefty discounts to the exchange’s hog index for Oct. 16 at 74.59 cents, traders said.
They said buy stops and fund buying contributed to futures gains, while cash price uncertainty and soft wholesale pork values side-lined fundamental bullish investors.
December finished up 1.875 cents/lb. higher at 67.85 cents, and February 0.875 cent higher at 68.85 cents.
Cash hog prices in the Midwest Tuesday morning were in line with Monday’s sales, underpinned by spotty supply shortages, regional hog dealers said.
Tuesday morning’s wholesale pork price was at $88.66/cwt, down 24 cents from Monday, USDA said.
Smithfield Foods will resume partial operations at its major Tar Heel, N.C., packing plant on Wednesday after shoring up part of the roof that gave way on Monday, a company spokeswoman said.
Packers on Tuesday processed 398,000 hogs, down 33,000 head from last week, based on USDA estimates.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
