Chicago Mercantile Exchange live cattle futures bounced on Thursday on technical buying and short-covering following three days of steep declines that had sliced prices by more than 5 percent, traders said.
Optimism that a deal on a revamped North American Free Trade Agreement (NAFTA) could be reached by the end of the month gave livestock markets underlying support. But traders remained cautious amid ongoing trade talks between the United States and China in Washington this week.
CME June live cattle ended up 1.225 cents at 103.050 cents per pound. Actively traded CME August live cattle futures added 0.050 cent at 99.100 cents per pound after earlier touching its lowest level since April 4.
Ample cattle supplies and weakening cash cattle prices at U.S. Plains feedlot markets have dragged down futures this week, although nearby contracts remain at a large discount to cash prices, which was limiting further futures declines.
Some U.S. Plains fed cattle have already traded from $112 to $118 per cwt this week, well below last week's sales of mostly $122 per cwt, traders said.
"The futures have already built in a lot of the weakness in cash prices going forward and the (futures) market is technically oversold," said Doug Houghton, analyst with Brock Associates Inc.
Although a beef price rally appeared to be reaching a top early this week, choice wholesale beef prices edged higher on Thursday, suggesting strong demand.
Beef packer margins also continued to climb, reaching as estimated $181.95 per head on Thursday, up from $139.95 a week ago, according to livestock marketing advisory service HedgersEdge.com.
Feeder cattle futures rose along with live cattle. The actively-traded August contract ended 2.000 cents higher at 138.725 cents per pound.
Lean hog futures advanced on firm cash markets and good pork demand, including for export.
The U.S. Department of Agriculture pegged net pork export sales last week at nearly 22,000 tons, up about 12 percent from the previous four-week average.
CME June hogs gained 0.575 cent to 76.475 cents per pound while July hogs ended 0.525 cent higher at 78.200 cents.