CHICAGO, Nov 1 (Reuters) - Chicago Mercantile Exchange live cattle futures edged higher on Thursday, as rising wholesale beef prices stoked hopes that meat packers would pay more for cattle in cash markets this week, traders said.
Cattle futures rebounded from early declines to reach the day’s highs after government data showed steep gains in beef prices.
The U.S. Department of Agriculture said wholesale choice-grade beef was up $1.00 to $217.93 per cwt, the highest since June. After the close of trading, USDA said wholesale beef prices were up $1.62 to $218.55.
“We continue to see boxed beef trend higher and that remains a positive,” said FuturesOne broker Matthew Wiegand.
Beef packers could earn more than $200 for each cattle they slaughter, according to advisory HedgersEdge LLC. That is up about $50 per head from a month ago.
Packers paid higher prices to feedlots for cattle last week, with sales of $113 to $115 per cwt in the U.S. Plains. Traders this week were hopeful for sales to rise even more.
“The trend should remain higher but we should see bigger numbers,” Wiegand said of some feedlots offering more animals this week to take advantage of the higher prices.
Most U.S. cash cattle sales typically occur on Fridays.
CME December live cattle settled up 0.175 cent at 117.125 cents per pound. The contract bounced from its low of 116.575 cents that also was near downside support at its 50-day moving average.
CME January feeder cattle were up 0.475 cent to 150.600 cents per pound while the front-month November contract edged down 0.175 cent to 153.300 cents.
Lean hog futures were widely mixed in bear-spreading. Traders continued to exit positions in front-month December hogs, which eased 0.250 cent to 58.200 cents in the third straight session of declines.
But deferred contracts were higher as investors rolled into positions for 2019 - April hogs were up 0.500 cent to 70.825 cents.
Lower prices for wholesale pork pointed to reduced demand for the meat, weighing on hog futures, traders said.
USDA said pork prices declined 66 cents to $75.39 per cwt.
Reporting by Michael Hirtzer; Editing by Richard Chang