CHICAGO, Oct 28 (Reuters) - U.S. live cattle futures extended their rally on Monday, lifted by strong cash cattle and beef prices, and funds continuing to add to their positions, traders said.
The wholesale choice beef price hit $227.51 per cwt on Monday, up $2.07, the U.S. Department of Agriculture (USDA) said. The wholesale select beef prices rose 18 cents, to $200.02 per cwt.
The cash cattle market on Monday continued to be bolstered by last week’s strength, said commodities broker Craig Turner at Daniels Trading. Southern U.S. Plains feedlot markets traded around $110 per cwt or more last week, up from an average of $108 last week, traders said.
“We’re in the seasonal period when demand for beef might be good - and it has been,” said commodities broker Craig Turner at Daniels Trading.
Meat packers slaughtered an estimated 118,000 head of cattle on Monday, the same rate as both a week earlier and a year ago, according to USDA data. Packer margins have remained relatively strong, too.
Chicago Mercantile Exchange (CME) October live cattle ended 1.025 cents higher at 113 cents per pound. The December contract added 0.675 cents to 116.75 cents per pound.
Feeder cattle futures also rose, with November futures up 0.400 cent at 145.725 cents per pound and the actively traded January contract up 0.100 cent at 141.600 cents.
Lean hog futures were higher most of the day as short-covering lifted prices, but the rally continued to be capped by ample hog supplies and uncertainty over the U.S.-China trade war.
Meat packers slaughtered an estimated 491,000 hogs on Monday, up from 488,000 a week earlier and 470,000 a year ago, according to USDA data. Packer margins have strengthened, too: $42.35 per head on Monday, up from $35.15 on Friday and $34.25 a week earlier.
USDA did not report cash prices in the closely followed Iowa and southern Minnesota market on Monday morning, but said the five day rolling average price was $55.50 per cwt.
CME December hogs ended the day up 0.900 cent at 65.65 cents per pound.
Traders are monitoring trade talks between the United States and China, the world’s top pork consumer, as a trade deal would likely include higher pork imports.
U.S. President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing. (Reporting by P.J. Huffstutter in Chicago; Editing by David Gregorio)