CME update: live cattle futures gain on uncertainty in grain complex

US live cattle futures rose on 29 April as mixed grain trade offered some relief for feed costs.

30 April 2021

2 minute read

North America

Reuters reports the strong beef demand continues to support prices.

CME's June live cattle futures added 0.600 cent to 116.050 cents per pound, while August feeder cattle futures gained 0.975 cents to close at 149.875 cents per pound.

Beef demand remained strong, with choice beef cut-outs adding $1.26 per cwt. to $293.76, while select cuts gained $0.79 to $279.79, according to the U.S. Department of Agriculture.

Export demand was also strong, as the USDA reported net sales of 23,600 tonnes, down 4% from the previous week, but up 22% from the prior four-week average.

Even as consumer demand for beef strengthened, higher meat prices were not translating to better cash cattle trade, said Altin Kalo, economist at Steiner Consulting Group.

"It doesn’t matter how strong beef demand is, if the packer has already covered their needs for cattle for the week and you’re a feedlot that has over-finished cattle," he said. "you have no choice but to lower your asking prices in order to get your cattle scheduled."

Cash cattle trade was light in Kansas and moderate in parts of Nebraska and Texas, with cattle going for $118-$119 per cwt. The USDA said.

Cattle slaughter will need to continue at a high pace to wear down producer supplies, Kalo said.

"It’s going to take some good slaughter weeks," he said. ". There’s just no margin of error. All it takes is for one plant to go down a few days, and you're back to square one."