CME cattle breaks three-day losing streak

 

 

Fund buying and short-covering helped CME live cattle Thursday bounce back from three consecutive down days.

 

Live cattle began the session on solid ground after traders surmised that recent futures losses were overstated. Speculative bullish traders were also drawn to front-months' price discounts to this week's cash cattle price results.

 

Cash-basis cattle brought mostly US$99-100 per hundredweight, compared with US$100-102 last week.

 

April gained further upward traction after it earlier bounced off the 20-day moving average support floor. And June caught the eye of fund buyers after it overcame 20- and 10-day moving average resistance obstacles.

 

Nearby-April live cattle ended up 0.87 cent, or 0.9%, at 98.00 cents a pound. Most-actively traded June closed 1.35 cents higher, or 1.5%, at 94.30 cents.

 

CME's feeder cattle also halted a three-day skid on short-covering, live cattle's rally and futures' price discounts to CME's feeder cattle index.

 

Nearby-April feeders ended up 0.40 cents, or 0.4%, at 112.25 cents. Most-actively traded May closed 0.60 cent, or 0.5%, at 112.80 cents.

 

Meanwhile, CME hogs finished higher, with several months hitting new contract highs, driven by solid fundamentals and short-covering.

 

Lean hogs jumped from the outset, stirred by wholesale pork prices Wednesday that rose for a 10th day in a row and pushed pork packer margins to their highest level since late January. Steady-to-higher cash hog values Thursday provided additional buying incentive for market bulls.

 

April through June hogs methodically felt their way to fresh seasonal tops and ignited orders to buy that hung over the market. While spot-April hogs were occupied with its 1 p.m. EDT expiration, May and June garnered a rush of fundamental-based support and aggressive spread activity.

 

Unofficially, May is the new spot month following April's exit. June, however, is generally considered the legitimate lead contract because it has substantially more volume than May.

 

Spot-April settled at 77.80 cents a pound, up 0.37, or 0.5%. Nearby-May closed 1.42 cents higher, or 1.7%, at 86.05 cents. And most-actively traded June ended 1.12 cents higher, or 1.3%, at 86.07 cents.

 

May pork bellies, which traded only six contracts Thursday, closed 1.50 cents higher, or 1.6%, at 95.55 cents on short-covering and lean hogs' rally. The May contract was also driven up by Wednesday's fresh belly price surge.