Chicago | Reuters — U.S. live cattle futures rose for a second straight session on Tuesday, lifted by higher cash beef prices and signs that cash cattle at feedlot auctions would trade at steady to higher prices this week.
Consumer demand for beef has remained solid despite rising coronavirus infection rates that have triggered lockdowns and shuttered many restaurants and food service operations, key outlets for beef.
“Despite concerns about virus issues, we still have a wholesale beef market that is still raging,” said Rich Nelson, chief strategist at Allendale Inc.
The U.S. Department of Agriculture (USDA) said the choice boxed beef cutout jumped $6.77 on Tuesday to $233.72/cwt, while the select cutout rose $1.61, to $213.96 (all figures US$).
Strong processing margins may encourage packers to pay up for cattle this week, with some early week bids reported around $110/cwt, which would be steady with last week’s highest trades.
Estimated beef packer margins were at $321.70 per head on Tuesday, up from $263.95 a week ago, according to livestock marketing advisory service HedgersEdge.com LLC.
Chicago Mercantile Exchange December live cattle gained 0.9 cent to settle at 111.325 cents/lb., while actively traded February futures were 1.55 cents higher at 113.575 cents/lb. January feeder cattle futures jumped 1.8 cents, to 139.725 cents/lb.
Lean hog futures ended higher on Tuesday in a short-covering bounce, despite weaker pork prices.
USDA quoted the pork carcass cutout at $78.60/cwt on Tuesday, down $2.55 from a day earlier.
December lean hogs settled 0.375 cent higher at 65.525 cents/lb., while actively traded February futures jumped 1.85 cents to 65.625 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.