CHICAGO, March 14 (Reuters) - Chicago Mercantile Exchange live cattle settled higher after Wednesday’s volatile session, supported by the uptick in wholesale beef values and futures’ discounts to this week’s cash prices, said traders.
Futures slipped from session highs due to the looming seasonal bump in supplies and U.S. stocks’ tumble amid renewed trade war fears.
“You’ve got a macro influence in the meats (futures), especially with what’s going on with the trade war potential between both China, and especially with the EU,” said Global Commodity Analytics & Consulting President Mike Zuzolo.
The United States exports roughly 25 percent of the pork and about 13 percent of the beef it produces, according to industry sources.
April live cattle closed 1.100 cents per pound higher at 123.000 cents, and above the 10-day moving average of 122.600 cents. June ended up 0.100 cent to 113.250.
So far this week slaughter-ready, or cash, cattle in the U.S. Plains traded from $126 to $128 per cwt, including $127 sales at Wednesday’s Fed Cattle Exchange (FCE) action. Cash cattle last week brought mostly $126.
Some packers may have needed supplies to make good on pre-booked meat orders by retailers in preparation for the start of spring grilling next week, a trader said.
However, some investors were disappointed about the FCE’s low sales volume of cattle that brought $127, said Zuzolo, citing another reason for futures’ pullback from Wednesday’s highs.
Short-covering and firmer live cattle futures stirred CME feeder cattle buying.
March feeders ended 0.500 cent per pound higher at 142.050 cents.
CME lean hogs ended mostly higher after weaker cash and wholesale pork prices stirred bear spreads, in which investors sold April futures and simultaneously bought deferred contracts, said traders.
They said speculative buying further enhanced deferred hog futures trading months.
April hogs closed 0.850 cent per pound lower at 66.875 cents. May finished up 0.200 cent at 72.050 cents and June ended 0.875 cent higher at 78.350 cents.
Packers resisted bidding up for hogs with more of them expected to come to market as cold winter weather transitions to warmer spring temperatures, which allows livestock to add weight faster, said analysts and traders.
Ham demand should taper off as a growing number grocers fill inventories for the upcoming Easter holiday, they said. (Reporting by Theopolis Waters; Editing by Cynthia Osterman)