CME live cattle, hogs to climb on U.S. fiscal deal

Wed Jan 2, 2013 9:42am EST

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Jan 2 (Reuters) - CME live cattle are expected to open
higher on Wednesday after the U.S. Congress reached a budget
deal preventing huge tax hikes and spending cuts, analysts and
traders said.
    * The fiscal resolution in Washington takes a lot of the
nervousness out of the equities and commodities markets, some of
which pulled back sharply on Monday.
                                 
    LIVE CATTLE - Seen 0.500 cent to 1.000 cent per lb higher.
    * February futures are at a sizable premium to last week's
$127 per cwt cash cattle sales, a trader said. But, higher
wholesale beef prices and tight cattle numbers could support
cash prices this week.
    * Plants that were closed over the Christmas and New Year
holidays disrupted the flow of fresh beef to grocers, lifting
wholesale prices, an analyst said.
    * He said packers are attempting to offset higher cash costs
by raising the price for beef at wholesale.
    * Processors are buying cattle for next week, the first full
slaughter week of 2013 which could lend cash support. 
    * Frigid temperatures in the western and central Midwest
could slow cattle weight gains, limiting their availability to
packers.
    
    FEEDER CATTLE - Called up 0.500 cent per lb to 1.000 cent.
    * Futures could follow possible live cattle market advances.

    LEAN HOGS - Seen 0.500 to 1.000 cent per lb higher.
    * Futures may surge in response to the fiscal deal and
Monday's jump in wholesale pork values, a trader said.
    * Despite fading margins, packers are seen raising cash hog
bids as they prepare for what could be a big post-holiday
weekend slaughter, analysts and traders said.  
    * They said the recent decline in hog weights suggests
producers are current in sending their animals to market, which
could help underpin cash prices.

 (Reporting by Theopolis Waters in Chicago; Editing by Grant
McCool)
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