U.S. livestock: CME live cattle end up off six-session skid

Hogs up but still rangebound

CME October 2021 live cattle (candlesticks) with Bollinger bands (20,2). (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed higher Wednesday on short-covering after a six-session decline and expectations of firming cash cattle prices, traders said.

However, the rally was capped by falling wholesale beef prices, with the U.S. grilling season poised to wind down after Monday’s Labour Day holiday.

CME October live cattle settled Wednesday up 0.675 cent at 127.575 cents/lb., bouncing after a dip to 126.575, the contract’s lowest since Aug. 6. The December contract ended up 0.125 cent at 133.6 cents.

CME feeder cattle futures closed mostly higher as well, with most-active October up 0.3 cent at 168.05 cents/lb.

“The cash cattle market feels like it is trying to firm up. The cattle numbers, it looks like, are starting to contract,” said Don Roose, president of Iowa-based U.S. Commodities, referring to monthly feedlot data.

“At the same time, it feels like the boxed beef (market) is trying to tip lower. So we’ve got kind of a ‘handcuffed’ situation,” Roose said.

Choice cuts of boxed beef fell by $3.66, to $338.45 per hundredweight (cwt), on Wednesday afternoon, while select cuts dropped by $4.46, to $307.57/cwt, according to the U.S. Department of Agriculture (USDA).

On the hog side, CME lean hog futures closed mostly higher in rangebound trade, with the October contract settling up 1.35 cents at 90.15 cents/lb.

Traders await Thursday’s weekly USDA export sales report which will outline demand for U.S. pork and beef in the week ended Aug. 26.

After the CME close, Brazil’s agriculture ministry said it was investigating a suspected case of BSE. The potential case would be Brazil’s first since 2019, when the government reported an “atypical” case in a 17-year-old cow.

Meanwhile, Argentina’s farming associations are discussing a potential grains trade strike to protest extended limits on beef exports, industry leaders said. Argentina’s government is seeking to tamp down meat prices amid runaway inflation.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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