CHICAGO, April 12 (Reuters) - Chicago Mercantile Exchange live cattle hit a two-week high on Thursday, driven by short-covering and futures’ discounts to this week’s prices for slaughter-ready, or cash, cattle, said traders.
Remaining cash prices in parts of the northern U.S. Plains might benefit from tight cattle supplies along with forecasts for heavy snow and high winds through the weekend, they said.
“It’s is going to be a typical good old spring-time blizzard. It will affect feedyards and hog farms in its path,” a feedlot manager said.
April live cattle closed up 2.300 cents per pound at 115.800 cents, and above the 20-day moving average of 115.660. June ended 2.125 cents higher at 103.700 cents and above the 10-day moving average of 102.282.
So far this week cash cattle in the Plains traded from $114 to $118 per cwt compared to mostly $116 to $118 a week earlier.
Cash cattle prices were better than expected given last week’s steep drop which, along with lighter cattle weights, suggest they may have been stabilizing, said Midwest Market President Brian Hoops.
“So that is seen as a minor victory, and enough to give us some short-covering in the cattle market,” said Hoops.
Some feedlots are holding out for at least $119 per cwt for unsold cattle emboldened by reduced cattle weights, winter-like weather and impressive packer profits.
CME feeder cattle closed up sharply on technical buying and live cattle futures gains.
April closed 3.600 cents per pound higher at 138.875 cents.
Upward trending cash prices and buying in CME’s neighboring cattle markets boosted the exchange’s lean hog contracts, said traders.
Packers raised bids for hogs while capitalizing on their long string of good profits and to ensure themselves of supplies before winter-like weather arrives in the Midwest over the weekend.
April hogs closed 1.000 cents per pound higher at 54.300 cents. May ended 1.400 cents higher at 69.325 cents. (Reporting by Theopolis Waters; Editing by Richard Chang)