Chicago | Reuters — U.S. live cattle futures touched six-week highs and feeder cattle exceeded seven-week highs on Tuesday as traders projected cash prices will remain steady or rise, after strengthening last week.
Feeder cattle are trading above where they were before a fire at a Tyson Foods slaughterhouse last month removed a key buyer from the market, sending prices tumbling. The Kansas slaughterhouse remains closed for repairs but meat packers have been killing more cattle at other facilities in the meantime.
Packers slaughtered an estimated at 117,000 cattle on Tuesday, down by 1,000 from a week ago and by 2,000 from a year ago. They killed an estimated 658,000 cattle through Saturday last week, up 0.7 per cent from a year ago.
Some traders had been fearing a bigger increase in slaughtering last week, said Rich Nelson, chief strategist for broker Allendale in Illinois. The smaller-than-expected total has helped support prices this week, he said.
A projected increase of cattle supplies into September and October also appears to have fallen short of expectations, Nelson said.
December live cattle futures reached their highest price since Aug. 9 before pulling back to end down 0.35 cent at 107.425 cents/lb. at the Chicago Mercantile Exchange (all figures US$).
Boxed beef prices also eased.
November feeder cattle futures climbed to their highest price since Aug. 5 and the contract closed up 0.475 cent at 140.2 cents/lb.
Lean hog futures were also higher at the CME, with the December contract finishing up 0.725 cent at 69.1 cents/lb.
Cash pork prices rose for carcasses, loins, ribs and bellies, according to U.S. Department of Agriculture data.
Hopes for Chinese buying helped underpin futures as Beijing and Washington plan for high-level trade talks in October, according to traders.
“The fact that we still have trade talks set for next month I think that’s still a contributing positive factor,” Nelson said.
China, the world’s biggest pork consumer, will auction 10,000 tonnes of imported pork from its state reserves on Thursday, according to a notice from the China Merchandise Reserve Management Centre.
The auction is the second to be announced so far this month as China looks to ease supply shortages and price spikes caused by the spread of African swine fever, a fatal pig disease.
South Korea confirmed its fourth and fifth cases of African swine fever at hog farms near its northern border, just a week after it first discovered an instance of the disease.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.