Live cattle futures closed higher Wednesday as packers and producers played a game of push-pull on pricing.
The weekly online Fed Cattle Exchange, which in recent months traders have watched closely for pricing discovery in the market, produced sales of 1,945 cattle versus 5,448 head for sale at a weighted average price of $1.3168 a pound for delivery over the next nine days, with cattle price for delivery 30 days out down to $1.2542 a pound.
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Traders watching the online auction were confounded by several offers to buy heifers at $1.35 a pound that didn't lead to a sale.
"You don't want to be the last one left in the game of musical chairs here," said Steve Wagner, an analyst at CHS Hedging.
Last week very few cattle sold in the online auction and those that did came in far below market rates fetched later in the week when live cattle sold at between $130 and $134 per 100 pounds, about $4 to $8 above the previous week with packers forced to pay higher prices to scramble to fill beef orders with leaner-than-usual cattle.
CME live cattle futures for April were up 1.7% at $1.32025 a pound at the close.
In other markets, CME lean hog futures sank 0.8% to end 64.675 cents a pound.
Dennis Smith, a broker at Archer Financial Services, said cash prices were fully steady to up 50 cents on interest in gathering inventory for next week.
"It's not clear if this is a function of excellent margins and expanded kill hours or a function of reduced numbers. The best case scenario would be a combination of both; we shall see," Mr. Smith said in a note.
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(END) Dow Jones Newswires
April 26, 2017 15:15 ET (19:15 GMT)