Chicago | Reuters—Chicago Mercantile Exchange (CME) live and feeder cattle futures bounced on Friday as strong cash prices buoyed futures markets, traders said.
Increased demand from meatpackers, as well as lower feed prices, have kept cash cattle prices high at a time of year when they would normally slip, analysts said.
“Cash prices coming in continue to be higher than expected,” said Altin Kalo, economist at Steiner Group. “The cash market is dictating the direction of futures.”
The number of processing plants has swelled within the past few years and as a result has increased the number of animals packers must buy, stimulating demand, Kalo said.
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CME August live cattle futures LCQ24ended up 0.125 cent at 182.375 cents per pound, settling down about two per cent for the week. CME August feeders FCQ24 finished up 2.5 cents at 258.65 cents per pound, settling down one per cent for the week.
Prices for the choice boxed beef cutout were up $0.41 at $322.06 per hundredweight (cwt), while select was down $1.07 at $302.31 per cwt, according to data from the U.S. Department of Agriculture.
Meanwhile, lean hog futures strengthened after plunging limit down on Wednesday and setting a contract low on Thursday on an oversupply of hogs and weak demand.
Friday’s bounce in hog futures was supported by bargain buying and strong wholesale prices for pork, traders said. Pork cutout values ticked up, including increases in carcass, belly and ham values.
CME August lean hog futures LHQ24 settled up 1.775 cents at 88.45 cents per pound, settling down 0.8 per cent for the week. October lean hog futures LHV24 ended up 0.75 cent at 70.15 cents per pound.
