Chicago | Reuters — U.S. live cattle futures gained on Thursday, as mixed grain trade offered some relief for feed costs, while strong beef demand continued to support prices, traders said.
CME’s June live cattle futures added 0.6 cent to 116.05 cents/lb., while August feeder cattle futures gained 0.975 cents to close at 149.875 cents/lb. (all figures US$).
Beef demand remained strong, with choice beef cutouts adding $1.26/cwt. to $293.76, while select cuts gained $0.79 to $279.79, according to the U.S. Department of Agriculture.
Export demand was also strong, as USDA reported net sales of 23,600 tonnes, down four per cent from the previous week, but up 22 per cent from the prior four-week average.
Even as consumer demand for beef strengthened, higher meat prices were not translating to better cash cattle trade, said Altin Kalo, economist at Steiner Consulting Group.
“It doesn’t matter how strong beef demand is, if the packer has already covered their needs for cattle for the week and you’re a feedlot that has over-finished cattle,” he said. “you have no choice but to lower your asking prices in order to get your cattle scheduled.”
Cash cattle trade was light in Kansas and moderate in parts of Nebraska and Texas, with cattle going for $118-$119/cwt, USDA said.
Cattle slaughter will need to continue at a high pace to wear down producer supplies, Kalo said.
“It’s going to take some good slaughter weeks,” he said. “There’s just no margin of error. All it takes is for one plant to go down a few days, and you’re back to square one.”
Meanwhile, U.S. lean hog futures eased as the cash market softened after climbing for nearly three months.
The CME’s lean hog index, a two-day weighted average of cash prices, eased to $107.01/cwt, its first step lower since Feb. 3.
CME most-active June lean hogs lost 2.4 cents to 106.725 cents/lb.
Pork exports sales of 35,600 tonnes were down noticeably from the previous week, but up 59 per cent from the prior four-week average, USDA said.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.