CME Live Cattle Rebound; Shorts Cover, Funds Buy

Chicago Mercantile Exchange live cattle futures closed higher on Thursday after short-covering and fund buying pared Wednesday's losses, said traders.

Expectations for steady to weaker prices for slaughter-ready, or cash, cattle by Friday pulled futures from morning highs, they said.

December live cattle finished up 0.625 cent per pound at 116.275 cents, and above the 10-day moving average of 116.040 cents. February ended 0.775 cent higher at 119.150 cents.

Packer bids for cash cattle in the U.S. Plains were at $114 to $116 per cwt versus up to $120 asking prices, said feedlot sources. Last week, cash cattle fetched $115 to $118.

Bearish investors expect lackluster wholesale beef demand and packing plant closures during the Christmas and New Year's holidays to pressure this week's cash prices.

Market bulls said fewer cattle for sale than last week and lower cattle weights, which suggest tight supplies in parts of the Plains, might underpin some cash returns.

On Thursday, USDA's export sales report for the week ended Dec. 7 showed U.S. beef exports at 6,200 tonnes in the current marketing year and 9,400 tonnes for 2018.

Short-covering and live cattle future's turnaround buoyed CME feeder cattle contracts. January feeder cattle closed 0.600 cent per pound higher at 146.250 cents. 

Hog Futures Extend Gains

Buy stops, short-covering and technical buying boosted CME lean hogs for a second straight day, said traders.

They said the morning's modest cash hog and wholesale pork price gains may have encouraged some futures buyers.

December hogs, which expired at noon CST (1800 GMT), settled up 0.075 cent per pound at 64.025 cents. It nearly matched CME's hog index for Dec. 12 at 64.86 cents.

February, the new lead month, closed 0.825 cent higher at 67.625 cents, and above the 100-day moving average of 66.903 cents.

A few processors bought hogs to shore up inventories heading into the weekend, said analysts and traders.

They added that average prices for cuts listed in USDA's daily morning wholesale pork report were higher except hams and pork bellies.

Ham prices have come down seasonally as grocers wrap up year-end holiday purchases, an analyst wrote in his newsletter to clients.

"The sharp decline in bellies was also expected considering the sharp run-up in belly prices during November," he said.

Thursday's USDA export sales report put U.S. pork exports in the current marketing year at 17,300 tonnes, and 20,300 for 2018.