Cattle and hog futures were mostly higher at the Chicago Mercantile Exchange on Wednesday, lifted by technical buying and gains in cash livestock markets, traders said.
Higher prices for wholesale beef and some pork cuts bolstered profit margins for meat packers, increasing demand for cattle and hogs at slaughter plants.
CME April live cattle settled 0.625 cent higher at 115.975 cents per pound while April feeder cattle were up 0.425 cent to 122.775 cents.
"The cash market is in pretty good shape. The beef market is going to go down – everyone knows that - but you have a pretty wide margin in there for the cattle," said Kevin Bost, president of Procurement Strategies Inc.
Bost added that beef prices could begin to ease soon as buyers slow purchasing due to recent high prices.
Choice-grade wholesale beef was up $1.61 to $213.61 per cwt, the highest since July, according to the U.S. Department of Agriculture. Average beef packer profit margins were $50.85 per head, up from a negative $3.05 a week ago, according to HedgersEdge LLC.
Cash cattle in Kansas at midday traded at $125 per cwt, about steady with sales last week, while cash cattle prices were up as much as $2 to $126 in Nebraska, feedlot sources said. The higher cattle prices came despite weaker trades at the weekly online Fed Cattle Exchange, where the average sale price fell to $123.69 per cwt, from $124.99 a week ago.
Firefighters continued to battle wildfires in the Plains cattle region that have already killed six people, scorched more than 1 million acres and resulted in hundreds of livestock deaths.
Hogs up second days
Lean hog futures were mostly higher, with front-month April hogs rising for the second straight session, finishing 0.375 cent higher at 68.425 cents per pound. June hogs were down 0.100 cent to 77.325 cents.
Cash hogs were down 63 cents to an average of $68.02 per cwt in the top market of Iowa and southern Minnesota, after gaining by nearly a $1 on Tuesday, according to USDA.
Wholesale pork was down 65 cents to $81.06 per cwt.
"Hog supplies remain ample to meet packer demand, even though packer margins remain strong and packers are likely starting to buy for next week's slaughter schedule," brokerage Brock Report said in a note to clients.