Cattle Futures: Cattle Complex Up

US - Chicago Mercantile Exchange live cattle and feeder cattle futures markets closed higher Thursday, carried there on the back of higher cash prices in the Plains states, market analysts and traders said.
calendar icon 6 April 2007
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Lean hog and pork belly futures closed mixed in the short session ahead of the holiday weekend. Most cattle traded in the Plains Wednesday and Thursday at $100 per hundredweight on a live basis and at $160 dressed, although there were reports of a few in Iowa up to $102, and some others early at $99. These prices were $3 to $4 higher than last week's market and were more than traders in the futures pit were expecting this week. The higher cash prices resulted from increased demand for product as retail buyers filled April and May needs, traders said. Beef markets have risen all week, according to the U.S. Department of Agriculture, and many in the industry feel prices will continue to move upward through next week as buyers book for one of the busiest seasons of the year.

The cash business "certainly sparked renewed buying interest" for live cattle and feeder cattle futures, said one veteran trader. Buyers included commodity fund-style firms, speculative traders and commercials who were lifting hedges.

Buy stops also were triggered as the most-active June contract moved above this week's previous high, which was set on Tuesday, traders said. The market then went on to establish a three-week high.

The gaps left on daily charts in the April, June and August contracts weren't filled during the session.

At the close, April live cattle was at 100.45 cents a pound, up 140 points, while June was at 96.32 cents, up 77 points. April feeder cattle was up 32 points at 111.12 cents, and the May contract was up 35 points at 111.85 cents.

Brokers and traders said ADM was a buyer in April live cattle after midday along with some options plays. In June, Rosenthal-Collins and Fimat were buyers. The main feature in August cattle was spreading.

In the feeder cattle pit, locals sold April and August, while ADM and R.J. O'Brien were sellers in May.

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