Cattle Futures Firm, Hogs Mixed on Technical Trading

U.S. live cattle futures rose on Wednesday in a rebound from losses in the previous session while some lean hog contracts weakened following recent gains in technically driven consolidation trade, traders and analysts said.

Rising wholesale beef prices buoyed cattle futures as retailers bought to stock meat coolers ahead of the Father's Day holiday this month and the U.S. Independence Day holiday next month, both popular times for outdoor grilling.

Investors were anticipating a seasonal break in cattle and beef prices as that beef buying slows. But cattle futures remained discounted to trades in Plains cash cattle markets, underpinning futures amid nearly record-high open interest in Chicago Mercantile cattle futures.

"The live cattle are responding to continued solid fundamentals. ... It's difficult to create a sustained downtrend," Cassie Fish, an analyst and author of blog The Beef, said in a phone interview.

CME June live cattle futures settled up 1.000 cent at 131.200 cents per pound while most-active August cattle futures firmed by 0.575 cent to 124.175 cents.

No deliveries have been posted so far against June futures in the delivery cycle that began on Monday, according to the CME Group. Cash cattle last week in the Plains fetched $134 to $137 per cwt, up from the June futures equivalent of about $131.

The weekly Fed Cattle Exchange online auction was scheduled for Thursday, postponed one day due to technical issues, according to the auction website.

The U.S. Department of Agriculture after the close of futures trading said wholesale choice beef was up 26 cents to $250.71 per cwt, the highest in more than a year.

CME August feeder cattle settled down 0.575 cent at 154.800 cents per pound, extending losses after tumbling nearly 3 percent on Tuesday.

CME June lean hog futures were off 0.025 cent to 81.625 cents and most-active July hogs were down 0.300 to 81.075 while most other deferred contracts edged higher.

Investors were taking profits after hog prices hit multimonth peaks last week and then failed to surpass those highs so far this week.

"There's not a lot of enthusiasm to get long $80 hogs," CHS Hedging analyst Steve Wagner said by phone.

Hogs were up 77 cents at an average of $76.12 per cwt in the top cash market in Iowa and southern Minnesota, the USDA said.

Wholesale pork was up 81 cents at $91.06 per cwt while the popular grilling cut of ribs gained $5.09 to $146.06 per cwt, according to government data.