Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose Tuesday, with the benchmark June contract hitting a high as poor feedlot conditions in portions of the U.S. Plains raised concerns about beef supplies, traders said.
Lean hogs closed lower in a profit-taking setback from contract highs set a day earlier.
Fat cattle futures surged as traders worried about muddy conditions in flooded states like Nebraska, which boasted the second-largest number of U.S. cattle in feedlots as of Feb. 1. Traders noted reduced weights in cattle being sold to beef packers ahead of the U.S. grilling season, which begins informally on Memorial Day weekend in late May.
“It’s all about weather, and taking tonnage off the market,” said Don Roose, president of Iowa-based U.S. Commodities. “And it’s that time of year; grilling season is here, so that is giving it one more push,” Roose said.
CME April live cattle futures ended up 0.8 cent at 129.125 cents/lb. while the June contract rose 0.15 cent at 122.725 cents (all figures US$).
April feeder cattle rose 1.5 cents at 147.8 cents/lb.
Lean hog futures declined, with the benchmark June contract closing lower for the first time in eight sessions. The market has been soaring as the spread of African swine fever in China’s huge hog herd ignited optimism about prospects for U.S. pork exports.
“It’s a market that was very overbought, and one that has dialed in an awful lot of Chinese issues,” Roose said.
CME April lean hogs settled down 0.2 cent at 70.825 cents/lb. while June hogs ended down 0.55 cent at 87.25 cents/lb.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.