Chicago | Reuters — U.S. live cattle futures reached a four-week high on Monday and feeder cattle hit their highest prices in more than five weeks as progress toward a COVID-19 vaccine raised hopes for a quick economic recovery from the pandemic and increased beef demand.
Lean hog futures also finished firmer.
Commodity and equity markets surged when Pfizer said its vaccine was more than 90 per cent effective in preventing COVID-19, marking the first successful results from a large-scale clinical trial.
The gains in livestock futures came after rising COVID-19 cases globally and increased lockdowns recently unnerved meat traders.
Pfizer’s announcement brought a bout of “relief buying” to the cattle markets, said Matt Wiegand, commodity broker for FuturesOne. There is “better optimism based on the outside markets,” he added.
Chicago Mercantile Exchange December live cattle futures settled 3.175 cents higher at 111.825 cents/lb. and hit their highest price since Oct. 12 (all figures US$). January feeder cattle futures surged 4.8 cents to end at 140.725 cents/lb. and touched their highest price since Sept. 30.
CME December lean hog futures rose 0.7 cent to close at 65.6 cents/lb.
Traders on Tuesday will review a monthly U.S. Department of Agriculture supply and demand report. Analysts surveyed by Reuters expect the agency to cut its U.S. yield and inventory estimates for corn and soy crops, both used for livestock feed.
Meat packers such as Tyson Foods and JBS USA on Monday slaughtered an estimated 117,000 cattle, down from 119,000 cattle a week ago and up from 112,000 cattle a year earlier, according to USDA. Packers slaughtered an estimated 493,000 hogs, unchanged from a week ago and up from 444,000 hogs a year ago.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.