CHICAGO - Chicago Mercantile Exchange live cattle futures finished well into positive territory on Wednesday, led by the steep climb in prices for market-ready, or cash cattle, traders said.
Spot December, which will expire on Thursday, closed 2.800 cents per lb higher at 133.000 cents, and February ended 1.200 cents higher at 136.700.
"Today it was full blown driven by cash market news. This cash move over the last two weeks is something I've never witnessed before," said Archer Financial Services broker Dennis Smith.
On Wednesday, packers in Kansas and Texas paid $133 to $135 per cwt for cash cattle, as much as $13 more than last week, according to feedlot sources.
Recent wintry weather disrupted cattle production at a time when packers bought supplies for the first full work week after the Christmas and New Year's holidays, traders and analysts said.
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Futures drew more strength from upward-trending wholesale beef values as grocers secured product squeezed by the winter storm and year-end holiday plant closures.
Wednesday morning's wholesale choice beef price rose $1.91 per cwt from Tuesday to $208.08. Select cuts climbed $3.14 to $200.80, based on U.S. Department of Agriculture data.
From Monday to Wednesday, packers processed 309,000 cattle, 31,000 less than a week ago, based on USDA estimates.
Investors are skeptical whether Wednesday's gains would last on Thursday when traders are expected to settle their accounts on the final trading session of the year.
Live cattle futures advances sent CME feeder cattle contracts higher. January ended 3.475 cents per lb higher at 165.950.
FIRM HOG FUTURES CLOSE
Near year-end positioning resulted in a firm CME lean hog futures settlement, traders said.
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Spot February finished 0.625 cent per lb higher at 59.775 cents, April up 0.150 cent to 66.025.
Cash price uncertainty, and the morning's slump in wholesale beef values, limited market gains.
The price for cash hogs in the Midwest Wednesday morning was little changed from Tuesday, with packers planning for Saturday's projected 260,000-plus slaughter, said regional hog dealers.
The morning's wholesale pork price fell $2.30 per cwt in light volume to $68.746 from Tuesday, pressured by more than $5 lower costs for loins and picnic shoulder cuts, the USDA said.
Grocers are reluctant to pay more for pork based the government's slaughter data that suggests hog deliveries are recovering from recent weather-related slow downs.
USDA estimated Wednesday's slaughter at 441,000 head, 11,000 more than a week ago.
