By Theopolis Waters
CHICAGO, May 2 Chicago Mercantile Exchange live
cattle futures closed higher Tuesday on fund buying,
short-covering and solid beef demand that briefly lifted the
June contract to its 3.000-cent daily price limit, said traders.
They said profit-taking and caution before this week's cash
prices pulled futures from new contract highs.
June ended 2.925 cents per pound higher to 127.050
cents, and hit a fresh high of 127.125 cents. August
closed up 0.625 cent to 120.800 cents and made a new high of
Tuesday morning's average wholesale beef price climbed
$2.50 per cwt to $228.77 from Monday. Select cuts surged $3.68
to $213.13, the U.S. Department of Agriculture said.
Some investors attributed this week's wholesale beef price
gains to grocers buying product for pent-up spring grilling
They also pointed out that May is National Beef Month, which
has supermarkets and restaurants featuring it for Mother's Day
Beef demand remains strong despite increased cattle
slaughters, said American Restaurant Association chief analyst
"We've been very impressed with beef price action and
statistics around demand, particularly with forward sales for
grinds such as hamburger," he said.
Market participants await this week's sale of market-ready,
or cash, cattle in the U.S. Plains that a week ago moved from
$134 to $136 per cwt.
Negative packer margins and more cattle for sale than last
week might weigh on cash returns, said traders.
They said last weekend's heavy snows in parts of the Plains
resulted in fewer animals for Wednesday morning's Fed Cattle
Weaker corn prices and initial live cattle futures gains
spiked CME feeder cattle to their 4.500-cent price limit
and a 13-month high.
May feeder cattle ended 1.025 cents per pound higher
at 149.625 cents, and marked a new high of 153.100 cents.
LOWER HOG SETTLEMENT
Fund buying and higher cash prices pushed up CME lean hogs,
May closed 0.825 cent per pound higher at 66.950
cents. Most actively traded June ended 0.875 cent higher
at 74.150 cents and topped its 40-day moving average of 74.081
Packers want to capitalize on their impressive margins by
maintaining the flow of hogs through plants, a trader said.
A major Midwest hog processor, idled by weather and
maintenance issues on Monday, did not resume operations on
Tuesday, a regional hog merchant said.
USDA estimated Tuesday's hog slaughter at 417,000 head,
22,000 fewer than a week ago.
(Reporting by Theopolis Waters; Editing by James Dalgleish)