Chicago Mercantile Exchange live cattle contracts on Wednesday pared some recent losses, helped by bargain buying and futures' discounts to early-week cash prices, said traders.
Investors bought August futures and sold deferred months in a trading strategy known as bull spreads.
August ended 1.125 cents per pound higher at 114.300 cents, and October up 0.600 cent to 113.375 cents.
On Wednesday a small number of market-ready, or cash, cattle in Nebraska brought $117 per cwt, down $1 to $3 from a week ago. Packer bids for other cattle there and elsewhere in the U.S. Plains were at $117 versus $120 asking prices.
Wednesday morning's Fed Cattle Exchange sold cattle from $117.50 to $118.25 per cwt compared to $118 to $118.50 a week earlier.
Processors seem uninterested in paying up for cattle at a time when beef at wholesale continues to struggle seasonally ahead of an anticipated supply increase, a trader said.
Still, profitable packer margins emboldened feedlots to hold out for more money for their animals, the trader said.
He added that beef demand could soon turn the corner as the U.S. Department of Agriculture buys meat for school lunch programs.
Firmer corn futures and lower cash feeder cattle prices weighed on nearby CME feeder cattle contracts.
August feeders ended down 0.050 cent per pound to at 146.475 cents.
Hog Futures Up Again
Technical buying and Wednesday morning's firmer wholesale pork values, led by $215.11 per cwt record-high pork belly prices, supported CME lean hogs for a second straight session, said traders.
Traders said investors were drawn to futures' discount to CME's hog index for July 24 at 90.44 cents.
August closed 0.550 cent per pound higher at 82.000 cents, and above the 20-day moving average of 81.900 cents. October ended 0.800 cent higher at 67.650 cents and above the 100-day moving average of 67.386 cents.
"There are some folks who are short bought on bellies in freezers to feed their bacon slice production lines," said Linn Group analyst John Ginzel.
Iowa/Minnesota hog weights for the week ended July 22 averaged 275.7 pounds, down 1.1 pounds from the week before and down 1.6 pounds from a year ago, based on Wednesday's USDA data.
Hot weather in parts of the Midwest slowed animal weight gains, said traders and analysts.