Chicago Mercantile Exchange live cattle surged to contract highs on Thursday and closed up the daily limit in most contacts on stronger-than-expected cash markets and robust demand for beef, traders said.
The front-month contract hit a 13-month peak as the market closed higher for the fifteenth time in 16 sessions.
April futures, which expire on Friday, closed 2.200 cents per pound higher at 135.600 cents while actively-traded June ended 3.000 cents higher at 121.525 cents.
June through April 2018 contracts all closed up the daily 3-cent limit, triggering expanded limits of 4.5 cents for Friday's session. The expiring April contract's limit will remain at 5 cents.
Feedlot cattle in the U.S. Plains traded $4 to $6 per cwt higher than a week ago amid smaller showlists and strong demand for beef, traders said. Grocers and restaurants are stocking up for Mother's Day promotions, which is expected to support wholesale beef values, they said.
“They (packers) need them and that's why they're out there paying up for these fat cattle. The cash is king this week,” said Domenic Varricchio, a broker with Schwieterman Inc.
Thursday's average wholesale choice beef price was 3 cents per cwt lower at $219.15 from Tuesday but select cuts jumped 96 cents to $206.68, the U.S. Department of Agriculture said.
CME feeder cattle followed live cattle higher as all traded months posted fresh contract highs and May through November closed up their daily 4.500-cents price limit.
Trading limits will be expanded t0 6.750 cents on Friday, per contract guidelines.
April feeder cattle , set to expire on Friday, ended 1 cent per pound higher at 140.850 cents. May closed up 4.500 cents at 146.575 cents.