Chicago Mercantile Exchange live cattle futures climbed on Wednesday as rising beef prices bolstered beef packer margins and fueled expectations for higher cash cattle prices this week, traders said.
CME April live cattle closed 0.825 cent per pound higher at 121.925 cents, June futures were up 0.525 cent at 105.575 cents and August added 0.350 cent to 105.275.
A seasonal rise in demand for beef has supported the market and lifted profits for packers. Milder spring temperatures around the United States following a stretch of colder-than-normal weather are expected to lift demand for outdoor grilling.
Packer margins widened to an estimated $68.45 per head on Wednesday, from $57.65 the previous day, according to livestock marketing advisory service HedgersEdge, as wholesale beef prices continued to climb.
The U.S. Department of Agriculture said the choice boxed beef cutout value rose 88 cents to $218.53 per cwt on Wednesday, up $6.89 from a week ago. The select cutout added $1.04 to $203.15 per cwt, up $4.58 from last week.
A small number of cattle have traded at Kansas feedlots from $121 to $124 per cwt, for delivery in mid-May, traders said. The majority of cattle on offer this week are expected to bring steady to firmer prices, they said.
There were no takers for the 3,194 animals offered at Wednesday’s Fed Cattle Exchange. Cattle there last week fetched $120-$122.
Feeder cattle futures shrugged off rallying corn prices and edged upward with live cattle.
April feeders gained 0.750 cent per pound to settle at 139.850 cents while May added 1.200 cents to 141.350 cents.
Lean hog futures rebounded from four days of declines in actively traded contracts, ending mostly higher on bargain buying and short-covering.
Narrow packer margins and plentiful supplies of hogs remain a concern for the market, but warmer weather is expected to lift pork demand.
May hogs closed up 1.100 cents per pound at 68.550 cents. Actively traded June futures rose 0.525 cent to 75.350 cents after hitting a two-week low a day earlier.