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CME update: cattle futures slip as market feels seasonal pressure

13 October 2020

US live cattle futures fell on 12 October following softening seasonal demand and the continued impact from backlogs at slaughterhouses.

Reuters reports that feeder cattle futures took a queue from the live market and fell lower.

CME December live cattle futures fell 1.525 cents to 108.350 cents per pound. Most-active December cattle dropped 1.775 cents to 110.825 cents.

CME January feeder cattle dropped 0.350 cent to 133.650 cents per pound as rising grain prices translate to higher feed costs, cutting into profit margins.

"The trade believes we are out of the woods on these front-end cattle, with respect to the hepushing back from the packer shutdown, but we aren’t through these cattle," said Larry Hicks, CEO of CattleHedging.com. "Expect lower fed cattle prices and live cattle futures the balance of October."

Hicks said heavier carcass weights are reminiscent of the end of 2015, when prices dipped and remained lower through the beginning of 2016.

"We're not going to have the big first quarter rally into April that everybody thinks we seasonally should," he said.

Boxed beef prices gained, with choice cuts adding $1.15 to $215.21 and select cuts increasing $1.70 to $201.52.

Packer margins fell to $226.65 per head on 12 October, down $73.10 from a week ago, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.

Read more about this story here.

Source: Reuters



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