CME update: livestock futures rise as meat production grows
US live cattle futures rose on 15 June after falling to their lowest price in more than a month last week.
16 June 2020
1 minute read
Reuters reports that the trading pattern comes as meat production increases despite cash market prices continuing to strain cattle producers’ profits.
CME August live cattle rose 0.675 cents to 96.000 cents. August feeder cattle futures ended 0.075 cents up at 131.175 cents per pound.
"We're still dealing with cash discounts in the livestock futures markets, as the cash market continues to be under pressure as slaughter rates are picking up," said Don Roose, president of US Commodities in West Des Moines, Iowa.
Beef output has been improving as slaughterhouses have resumed operations, after closing temporarily in April and May due to outbreaks of the new coronavirus among plant workers.
The USDA reported that meat processors had slaughtered an estimated 119,000 cattle on Monday 15 June, up from 117,000 cattle a week earlier.
That cattle kill rate is expected to continue to increase as plants try to run over-capacity in the coming weeks, in order to keep production at full speed, market analysts said.
But meatpacking workers have often been absent because they are quarantined or afraid to return to work after a severe coronavirus outbreak. Nationwide, 30 percent to 50 percent of meatpacking employees were absent last week, said Mark Lauritsen, a vice president at the United Food and Commercial Workers International Union (UFCW).
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