Chicago | Reuters—Chicago Mercantile Exchange live and feeder cattle futures hit contract highs on Wednesday as strong consumer demand for beef and another spike in wholesale boxed beef prices supported an ongoing futures rally.
Despite concerns that high prices would push consumers away from pricey beef, strong boxed beef prices have indicated to traders that consumers are willing to pay up for beef.
The choice boxed beef cutout jumped $4.92 to $374.86 per cwt, while the select cutout rose $5.42 to $351.60 per cwt, according to U.S. Department of Agriculture data on Wednesday afternoon.
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CME October live cattle futures LCV25 ended 2.55 cents higher to 229.65 cents per pound. September feeder futures FCU25 rose 4.675 cents to 344.225 cents per pound. October hogs LHV25 ended 0.825 cent lower at 91.975 cents per pound.
The U.S. cattle herd is lingering near a 75-year low after severe drought forced ranchers to cull their herds. Though some ranchers have slowly started rebuilding their herds and retaining female cows for breeding, the rebuild is likely to be slow, analysts said.
Meanwhile, China has extended for three months an investigation period for beef imports, the commerce ministry said on Wednesday, giving global suppliers a breather from the prospect of trade curbs as domestic industry battles to reduce a supply glut.
The inquiry, launched last December, came as slowing demand squeezes the world’s largest market for imports and consumption, but does not target a particular country.
