CME update: cattle futures prices rise as Trump administration investigates beef market
US live cattle futures rose on 8 May along with cash prices as the US government probed the beef market.
11 May 2020
2 minute read
Reuters reports that prices for cattle in the cash market rebounded after President Trump urged the Justice Department to investigate allegations that the meat packing industry broke antitrust laws.
Cash prices rose to $115 and $116 for cattle from $110 on Thursday and $95 earlier in the week, helping support futures, said Rich Nelson, chief strategist for commodity broker Allendale.
Cash prices had previously suffered as the coronavirus pandemic slowed operations at some slaughterhouses and temporarily closed others, leaving ranchers nowhere to ship their cattle.
Retailers like Kroger and Costco have limited sales of some meat items as a result, and wholesale boxed beef prices and margins for beef processors have climbed.
"I think packers are saying, 'We have to give back a little bit of this margin,'" Nelson said.
Beef processor Cargill said allegations of price-fixing lack merit.
Chicago Mercantile Exchange (CME) June live cattle futures rose 0.675 cents to 94.650 cents per pound. The market's daily limit will revert to its standard of 3 cents on Monday after temporarily expanding to 4.5 cents on Friday, the exchange said.
August feeder cattle futures fell 1.2 cents to 136.950 cents per pound.
Analysts expect an increase in processing capacity as processing plants closed by the coronavirus reopen.
Trump has declared meat processing essential, but some plant employees have said they are afraid to return to work, even with safety measures and limited production.
The largest union representing US meatpacking workers said on Friday it opposed the reopening of plants because the Trump administration had failed to guarantee workers' safety.
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