Chicago Mercantile Exchange (CME) live cattle futures closed higher on Wednesday on short-covering and consolidation after recent market losses, said analysts and traders.
Some investors bought deferred CME live cattle contracts ahead of the U.S. Department of Agriculture's monthly cattle-on-feed report on Friday.
Analysts polled by Reuters expect the report to show a nine per cent drop in the number of cattle placed in feedlots in February due to high feed costs. Lower placements could mean fewer market-ready cattle later and higher prices.
CME live cattle recovered from session lows following the recent downturn in cash cattle and wholesale beef prices.
So far in this week's cash markets in Texas and Nebraska cattle traded at $124-$125 per hundredweight (cwt), compared with $126-$127, said feedlot sources (all figures US$).
Feedlots in Kansas are holding out for about $127, a feedlot manager said.
USDA reported the price for wholesale choice beef on Wednesday at $193.41 per cwt, down 77 cents from Tuesday; select cuts dropped 62 cents to $193.03.
The government's wholesale beef data Wednesday morning showed choice beef priced 27 cents below select items, the first time since April as demand lagged for high-end cuts.
Packers want to control cash spending as grocers push back against higher beef costs. High gasoline prices and the income tax hike have limited discretionary consumer spending.
Packers are buying cattle for next week, which will have one less production day because of the Good Friday holiday on March 29.
April live cattle settled 0.75 cent per pound higher at 126.05 cents. June ended 0.925 cent higher at 121.9 cents.
CME feeder cattle sank to a 7 1/2-month low for a second straight session as corn prices firmed.
Deferred CME feeder cattle premiums' to the exchange's cash feeder index of 136.24 cents discouraged speculative buyers.
Spot March feeder cattle ended 0.9 cent/lb. lower at 135.1 cents. Most-actively traded April closed at 137.65 cents, down 0.725 cents.
Hogs mixed amid lower cash
CME April hogs closed lower as plentiful supplies and languid wholesale pork sales prompted packers to further slash cash hog bids, analysts and traders said.
USDA data Wednesday showed the average hog price in the most-watched Iowa/Minnesota market at $72.07/cwt, down $1.34 from Tuesday.
Some producers are marketing hogs ahead of schedule to avoid potentially lower cash prices next week, a trader said. And the holiday-shortened work week will limit packer needs for supplies, he said.
From Monday to Wednesday, packers slaughtered an estimated 1.278 million hogs, 9,000 more than a week ago and up 34,000 from a year earlier.
Spreaders sold the April contract and bought June, traders said.
Spot April ended at 77.875 cents/lb., down 0.35 cent. Most-actively traded June closed up 0.225 cent to 88.5 cents.
-- Theopolis Waters writes for Reuters from Chicago.