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CME update: cattle futures rise as beef prices and grilling demand increase

17 August 2020

CME live cattle futures continued their rise on 14 August, supported by increasing beef prices and expectations of sustained meat demand before the Labour Day weekend.

Reuters reports that beef prices typically rise heading into the September holiday, when consumers often grill at home with family and friends to mark the end of summer.

Beef slaughter rates in the US continue to rise, as have cut-out prices. Prices for choice cuts of boxed beef jumped $3.09 to $214.04 per cwt on 14 August, while select cuts increased by $1.83 to $199.24 per cwt according to USDA data.

But profit margins for beef processors eased on Friday, to $248.85 per head of cattle from $249.55 a day earlier, according to Denver-based livestock marketing advisory service HedgersEdge.com.

"There are a lot of indications that grilling is big right now with the weather being nice and people feeling sick of being stuck inside," said Karl Setzer, commodity risk analyst for AgriVisor. "That is translating into meat demand."

CME October live cattle rose 0.075 cent to settle at 110.225 cents per pound. September feeder cattle slipped 0.800 cent to 146.575 cents per pound.

There also is a feeling among traders that the market has bottomed after recent volatility, particularly for the beef sector, said Don Roose, president of Iowa-based broker US Commodities.

"The cash cattle trade was done for the week, and the sense is that cash prices will be up another $2 or $3 next week," Roose added.

Read more about this story here.

Source: Reuters



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