Chicago | Reuters — Chicago Mercantile Exchange cattle futures rallied to fresh contract highs on Tuesday, supported by technical buying and strength in the cash market, traders said.
Livestock traders did not see any reason to disrupt the recent trend at a time of strong seasonal demand, with traditionally active grilling holidays such as Father’s Day and U.S. Independence Day on the horizon.
“The demand tends to be very inelastic right now,” said Altin Kalo with Steiner Consulting Group. “The real test of the market will come in July.”
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Live cattle contracts have risen for nine straight sessions and feeder cattle contracts have posted gains for six sessions in a row.
Hog futures regained ground after slipping on Monday, with the benchmark July contract hitting its highest in three weeks.
But hog futures closed weaker even as pork prices surged higher, as traders cited overbought technical conditions for a pause in the rally that had pushed prices to a two-week high on Friday.
Benchmark CME August live cattle futures settled up 2.225 cents at 175.5 cents/lb. after posting a fresh contract high of 175.95 cents. August feeder cattle finished up 0.65 cents at 243.25 cents/lb. and hit a new high of 244.475 cents during the session.
CME July lean hog futures rose 4.175 cents, to 88.325 cents/lb., peaking at 88.525 cents, its highest since May 17.
In the wholesale beef market, the U.S. Department of Agriculture priced choice cuts on Tuesday afternoon at $321.40/cwt, up $7.21 from a day earlier. Prices for select cuts rose $2.71, to $299.44/cwt.
Wholesale pork prices fell $4.08, to $84.98/cwt, according to USDA data.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.
