Chicago Mercantile Exchange live cattle futures rose on Monday as profitable packer margins and firm beef prices fueled expectations that cash cattle would trade at higher prices this week.
December live cattle finished up 1.250 cents per pound at 119.825 cents after holding chart-based support at the 50-day moving average around $118.675. Actively-traded February ended 1.475 cents higher at 126.050 cents.
"Folks are expecting the cash trade to be a little better this week. Showlists are a little lower and I don't think they (packers) got enough bought last week," said Schwieterman Inc broker Domenic Varricchio.
"Packers are making plenty of money so they're going to keep feeding their money-making machine," he said.
Slaughter-ready cattle at U.S. Plains feedlot markets traded at $118 to $120 per cwt last week.
Firm demand for beef as consumers turn away from turkey following Thanksgiving feasts was also supportive to the cattle market, traders and analysts said.
Beef packer margins widened to an estimated $81.10 per head on Monday, from $63.85 on Friday and $28.50 a week ago, according to livestock marketing advisory service HedgersEdge.com LLC.
Feeder cattle futures rose with the live cattle market and as the price of corn, a key cattle input, fell for a second straight trading session.
Steady to higher feeder cattle prices at the closely tracked weekly cash auction in Oklahoma City added further support.
January feeder cattle closed up 1.150 cents per pound at 154.450 cents.
CME lean hog futures advanced on strong packer margins and seasonally higher demand, with the post-Thanksgiving holiday slaughter normally among the most active weeks of the year for packing plants.
Wholesale pork prices firmed on Monday and packer margins, according to HedgersEdge, widened slightly to about $45.20 per head, up more than $3 from a week ago.
December hogs ended 1.275 cents per pound higher at 64.525 cents and February closed up 0.700 cent to 70.100 cents.