Rising U.S. beef prices buoy CME live cattle futures

U.S. live cattle futures rose on Tuesday for a fourth straight session, with deferred months setting life-of-contract highs as robust demand for beef lifted packer profit margins and bolstered demand for market-ready cattle

Reuters

Chicago Mercantile Exchange April live cattle futures settled up 0.150 cent at 123.100 cents per pound, while June ended up 0.650 cent at 119.475 cents after setting a contract high at 119.700 cents.

Cattle futures drew support from wholesale beef values that have been rising nearly every day since Jan. 6. The U.S. Department of Agriculture reported choice cuts up another $2.33 at $229.06 per cwt on Tuesday afternoon and select cuts up $1.12 at $217.33.

“Feeder cattle futures fell, bucking the strength in live cattle, as traders reacted to surging prices for corn that point to rising feed costs”

 

“The most impressive stats in the meat sector may be the strength in the beef product market, which continue a strong move higher. Beef demand continues to exceed expectations,” Arlan Suderman, StoneX chief commodity economist, wrote in a note to clients.

Packer margins for cattle topped $340 per head, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC, raising expectations of a stronger cash trade this week.

Feetlot operators were asking $114 to $115 per cwt for market-ready cattle in Kansas and Texas this week, traders said, following trades last week at around $110 per cwt.

Nonetheless, feeder cattle futures fell, bucking the strength in live cattle, as traders reacted to surging prices for corn that point to rising feed costs.

CME March feeders settled down 2.375 cents at 141.475 cents per pound.

Lean hog futures followed the live cattle market higher, with wintry weather in the Midwest and Plains lending support. Most hog futures months set contract highs.

CME’s most-active April hog contract settled up 0.325 cent at 76.950 cents per pound, after hitting a contract high at 77.600 cents. However, the spot February contract fell 0.175 cent to finish at 70.450 cents per pound.

Reporting by Julie Ingwersen; Editing by David Gregorio