U.S. livestock: Cash price outlook lift CME live cattle to record high

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Thursday hit their highest level ever in anticipation of strong prices for market-ready, or cash, cattle led by record-high beef values, traders said.

“Retail beef demand has been on a tear while feeding the bulls in the cattle pit, increasing packer margins and causing feedlots to hold out for more money,” a trader said.

Last week, cash cattle in Texas and Kansas fetched $150 per hundredweight (cwt), and $148 to $150 in Nebraska (all figures US$).

The morning wholesale price for choice beef rose $1.26/cwt from Wednesday to $245.78, surpassing Tuesday’s record, according to U.S. Department of Agriculture data.

Beef packer margins for Thursday were at positive $103.88 per head, compared with a positive $99.14 on Wednesday and a positive $68.10 a week ago, as calculated by industry analytics firm HedgersEdge.com.

August live cattle led advances after traders simultaneously bought that month and sold the June contract that will expire on Monday.

CME live cattle draw more support from fund buying and feeder cattle futures’ record-setting pace.

On Friday, some investors may pocket profits before Monday, the last trading day for the month and end of the quarter, a trader said.

June live cattle finished 1.8 cents per pound higher at 153.75 cents, and August ended up 2.1 cents at 152.75 cents.

CME feeder cattle hit a new high, with front-months up the three-cent maximum price limit, helped by higher live cattle futures and fund buying.

August and September closed up three cents per pound to 215.125 and 216.9 cents, respectively.

Hogs up with pork prices

Nearby CME hog contracts closed higher, supported by an all-time pork prices record amid tight supplies and supermarket demand for July 4 holiday cookouts, traders said.

Thursday morning’s wholesale pork price rose $1.48/cwt from Wednesday to $135.15, topping Tuesday’s record, said USDA.

The morning’s steady to $2/cwt higher prices for slaughter-ready, or cash hogs, in the Midwest provided more market support.

Packers spent more for hogs given profitable margins, fewer animals and brisk wholesale pork demand.

However, packing plants will be closed at least one day next week for the holiday, which might pressure cash hog bids. And, meat demand could fade until retailers gauge how much meat moved over the holiday weekend.

Trepidation before Friday’s government quarterly hog report sank deferred contracts.

Analysts expect Friday’s data to show the pig virus hurt U.S. hog supplies while fuelling herd expansion due to high hog prices and cheaper feed costs.

July hogs closed up 0.55 cent/lb. to 129.85, and August finished up 0.15 cent at 128.8 cents.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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