U.S. livestock: Rising beef prices buoy CME live cattle futures

Colder spell in U.S. Midwest, Plains lifts hogs

Chicago | Reuters — U.S. live cattle futures rose on Tuesday for a fourth straight session, with deferred months setting life-of-contract highs as robust demand for beef lifted packer profit margins and bolstered demand for market-ready cattle, traders said.

Chicago Mercantile Exchange April live cattle futures settled up 0.15 cent at 123.1 cents/lb., while June ended up 0.65 cent at 119.475 cents after setting a contract high at 119.7 cents (all figures US$).

Cattle futures drew support from wholesale beef values that have been rising nearly every day since Jan. 6. The U.S. Department of Agriculture reported choice cuts up another $2.33 at $229.06/cwt on Tuesday afternoon and select cuts up $1.12 at $217.33.

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“The most impressive stats in the meat sector may be the strength in the beef product market, which continue a strong move higher. Beef demand continues to exceed expectations,” Arlan Suderman, StoneX chief commodity economist, wrote in a note to clients.

Packer margins for cattle topped $340 per head, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC, raising expectations of a stronger cash trade this week.

Feetlot operators were asking $114-$115/cwt for market-ready cattle in Kansas and Texas this week, traders said, following trades last week at around $110/cwt.

Nonetheless, feeder cattle futures fell, bucking the strength in live cattle, as traders reacted to surging prices for corn that point to rising feed costs.

CME March feeders settled down 2.375 cents at 141.475 cents/lb.

Lean hog futures followed the live cattle market higher, with wintry weather in the Midwest and Plains lending support. Most hog futures months set contract highs.

CME’s most-active April hog contract settled up 0.325 cent at 76.95 cents/lb., after hitting a contract high at 77.6 cents. However, the spot February contract fell 0.175 cent to finish at 70.45 cents/lb.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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