Chicago | Reuters — Chicago Mercantile Exchange feeder cattle futures fell to their lowest level since May on Friday before ending higher, while live cattle recovered from June lows reached earlier this week.
Strength in the cash market helped boost futures, traders said.
Reports of meatpackers paying $185/cwt in Texas and $186/cwt in Nebraska represented a “pretty impressive cash trade,” said Dennis Smith, a commodity broker and livestock analyst for Archer Financial Services (all figures US$). Earlier this week, cash trades were around $183/cwt in Texas and $182-$185 in Nebraska.
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CME January feeder cattle closed up 0.625 cent at 235.7 cents/lb. after dropping to 233.35 cents, the lowest price in more than five months.
December live cattle futures ended up 2.9 cents at 182.225 cents/lb., while February live cattle advanced 2.55 cents to close at 182.95 cents/lb.
Live cattle and feeder cattle futures on Monday and Tuesday reached their lowest prices since June after the U.S. government, in a report issued after markets closed on Friday, said that producers placed more cattle than expected into U.S. feedlots in September.
Smith said the markets face greater challenges from the risk for beef demand to suffer from a potential economic slowdown. Global stocks struggled on Friday as data confirmed U.S. inflation remained high.
“You’re talking about a consumer that’s getting pressed hard, especially the middle class and lower middle class,” Smith said. “We’re pulling the demand rug out from under the cattle market.”
Tight supplies of U.S. cattle have pushed up beef prices, and the U.S. Department of Agriculture on Friday reported slight increases in boxed beef cutouts.
USDA separately quoted the wholesale pork carcass cutout at $86.40/cwt, up 67 cents from Thursday, as ham and belly values increased.
Most-active December lean hog futures closed up 1.85 cents at 70.475 cents/lb. at the CME and hit the highest price in two weeks.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
