Chicago | Reuters — U.S. cattle futures rose on Thursday with feeder cattle leading the pack, as corn prices eased on profit taking ahead of the long holiday weekend, analysts said.
Thursday’s feeder cattle rally was due in part to a slump in corn futures, traders said. Earlier this week, the most-active contract surged amid sharp cuts to U.S. corn acreage by the U.S. Department of Agriculture.
Adding to the day’s corn price pressure were forecasts of timely rainfall across parts of the U.S. Midwest, as well as news that federal proposals about biofuel blending requirements are being put on hold.
The benchmark August live cattle contract on the Chicago Mercantile Exchange rallied as slaughterhouses continue to work through a backlog of heavyweight cattle, and futures rose into a positive basis over recent cash market prices.
CME August live cattle settled up 2.1 cents at 99.4 cents/lb. (all figures US$). CME August feeder cattle settled up 1.8 cents at 134.875 cents/lb.
Cash cattle trade around $95-$96/cwt this week in Texas and Kansas, two traders said.
Hog futures inched upward, as U.S. exporters shipped 21,639 tonnes of pork to China in the week ended June 25, the biggest weekly total since late April.
This week’s run-up in corn prices is the latest blow to hog farmers, who have been battered by low prices and a dearth of slaughterhouse capacity as packers shuttered plants amid COVID-19 outbreaks among their workers.
“When you’re already losing money on every head of hog you’re putting down, and your feed costs jump too, it’s just sticking the knife in you,” said independent trader Dan Norcini.
CME August lean hogs settled up 0.125 cent at 49.2 cents/lb., while October hogs ended up 0.075 cents at 48.35 cents/lb.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.