U.S. livestock: CME cattle futures rise as JBS reopens plants

July hogs down off Tuesday's peak

CME August 2021 live cattle (candlesticks) with 20-day moving average (red line) and July 2021 lean hogs (pink open/high/low/close). (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange (CME) cattle futures firmed on Wednesday, bouncing back from Tuesday’s steep decline that stemmed from a shutdown of JBS SA’s beef operations due to a cyberattack.

JBS employees were returning to U.S. meat plants on Wednesday, with a return to full capacity in the next couple of days.

“The general trade is thinking, ‘Well, it’s not like we are going to be down day after day,'” said Don Roose, president of Iowa-based U.S. Commodities. “I think the feeling is, it’s just relief buying.”

CME August live cattle futures ended up 2.65 cents at 119.25 cents/lb. (all figures US$). August feeder cattle closed 3.175 cents firmer at 152.325 cents/lb.

“It’s a psychological boost, more than anything,” said Dan Norcini, an independent livestock trader. “That’s all it is. Guys who were short on the news yesterday, they get nervous, they panic and they buy it all back. Shorts are covering.”

Prices for choice cuts of beef shipped to wholesale buyers in large boxes jumped $5.60, to $335.16 per hundredweight, according to the U.S. Department of Agriculture. Prices for select cuts climbed $5.43, to $311.88/cwt. Both choice and select cuts were at one-year highs.

U.S. meatpackers slaughtered 105,000 cattle on Wednesday, up from 94,000 on Tuesday, according to USDA estimates. Pork processors slaughtered 439,000 hogs, up from 390,000.

JBS and three other beef packers in the United States account for the purchase and slaughter of about 85 per cent of all fed cattle.

In the pork market, CME July lean hog futures fell 1.175 cents to 118.475 cents/lb. after hitting a contract high of 120.4 cents on Tuesday.

— Reporting for Reuters by Mark Weinraub; additional reporting by Julie Ingwersen.

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