By Julie Ingwersen
CHICAGO, Jan 23 (Reuters) – Chicago Mercantile Exchange live cattle futures hit a two-month high on Tuesday, led by rising wholesale beef prices, and as wintry weather in the Plains reduced cattle weights and limited the movement of animals into meat plants, traders said.
CME April live cattle futures settled up 0.925 cent at 177.825 cents per pound, after rising to 178.175 cents, the contract’s highest level since Nov. 22.
March feeder cattle rose 2.375 cents to 233.650 cents per pound.
Brutal cold weather followed snowstorms in the Plains earlier this month, stressing cattle in feedlots and limiting weight gain. While temperatures have since moderated, a thaw can result in muddy pens, another source of stress.
The U.S. Department of Agriculture (USDA) priced choice cuts of beef on Tuesday afternoon at $301.66 per hundredweight (cwt), up $2.99 from Monday and the highest reading since Nov. 6. Select cuts rose $1.80 to $288.38 per cwt.
“It’s a function of the weather,” Dan Norcini, an independent livestock trader, said of elevated beef prices.
“We are losing the weight on these cattle. They have to eat a lot of food just to maintain their body temperature, so they tend to drop weight.”
Similarly, CME hog futures drew support from rising wholesale pork prices. The USDA priced the pork carcass cutout late Monday at $90.17 per cwt, up $1.61 from Friday and the highest reading since Nov. 6.
CME benchmark April hogs rose 2.700 cents on Tuesday to end at 80.325 cents, breaking through chart resistance at the contract’s 100-day moving average.
“Today you had some buying based on the strong cutout from yesterday afternoon,” Norcini said. “That pushed (futures) above some key technical levels, and then the hedge funds started covering shorts,” he said.
However, pork prices cooled late on Tuesday, with the USDA pricing the cutout $88.03, down $2.14.
Unlike cattle, hogs are typically raised indoors, Norcini noted. Winter weather tends to slow the transport of hogs to meat packing plants temporarily, Shape Kapseln Erfahrungen but shipments resume once the weather breaks, potentially depressing pork prices. (Reporting by Julie Ingwersen; Editing by Sherry Jacob-Phillips)