Chicago | Reuters — Chicago Mercantile Exchange live cattle futures galloped to new highs on Thursday on short-covering combined with continued concerns about U.S. tight supplies, brokers said.
October live cattle futures ended up 2.325 cents at 185.475 cents/lb. after setting a contract high of 185.775 cents/lb. (all figures US$). December live cattle settled 2.5 cents stronger at 190.35 cents and reached a high of 190.55 cents.
Feeder cattle futures also rallied, with the October contract finishing up 2.825 cents at 261.875 cents/lb. after nearing a contract high set on Tuesday.
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“It looks like we’re getting a short squeeze going,” FuturesOne commodity broker Matt Wiegand said. “Obviously (cattle) numbers are still short nearby.”
The U.S. beef cow herd at the start of the year dropped to its lowest level since 1962 after a severe drought raised costs for livestock feed.
Tighter supplies have reduced profit margins for processors. Meatpackers earned $30.90 per head of cattle they slaughtered on Thursday, down from $72.45 per head a week ago, according to HedgersEdge.com.
Meatpackers slaughtered an estimated 124,000 cattle, down from 126,000 cattle a week ago and 127,000 cattle a year ago, the U.S. Department of Agriculture said.
Wholesale beef prices have weakened seasonally. The choice boxed beef cutout was $1.18 lower at $306.37/cwt, USDA data show.
USDA said separately on Thursday that net beef export sales in the week ended Sept. 7 were 6,200 metric tonnes for 2023, down 48 per cent from the previous week and 56 per cent from the prior four-week average.
Weekly export sales for U.S. pork were 23,100 metric tonnes for 2023, down 12 per cent from the previous week and 26 per cent from the prior four-week average.
CME October lean hog futures ended down 0.625 cent at 83.35 cents/lb. as the market pulled back from a one-month high reached on Wednesday.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
