Chicago Mercantile Exchange live cattle futures on Tuesday rallied from Monday's losses, ignited by short-covering as investors digested initial cash prices and firmer wholesale beef values, said traders.
Technical buying contributed to market advances along with unwinding of Monday's short live cattle futures long hog spreads, they said.
December live cattle finished up 0.875 cent per pound at 117.975 cents. February ended 1.025 cents higher at 124.050 cents and above the 40-day moving average of 123.790 cents.
On Tuesday slaughter-ready, or cash, cattle in the U.S. Plains traded at $118 per cwt, down $1 from a week ago in the U.S. Plains.
Typically packers and feedlots buy and sell cattle after Wednesday, but the holiday moved those negotiations ahead of schedule, a trader said.
Processors resisted paying more for cattle than last week while trying to improve their margins and sell beef to retailers that are waiting to see how much product moves over the Thanksgiving holiday.
Beef and pork packing plants will be closed over the holiday, thereby reducing their need for supplies.
On Wednesday at noon EST (1700 GMT), the U.S. Department of Agriculture will issue the monthly cold storage report that will include October total beef and pork inventories.
A survey of analysts, on average, projected last month's total beef stocks at 489.4 million pounds and 595.1 million for pork.
Short-covering and live cattle futures buying pulled up CME live cattle contracts. January feeder cattle closed up 2.075 cents per pound at 151.625 cents.
Hog Futures Finish Lower
CME lean hogs posted losses tied to technical selling and spreads out of hog futures into live cattle contracts, said traders.
December hogs ended down 1.325 cents per pound to 60.700 cents and below the 100-day moving average of 61.612 cents. February closed 1.525 cents lower at 66.950 cents.
Retailers are buying pork sparingly until they can gauge post-holiday product movement, while a few packers bought hogs for next week's production schedule, a trader said.