Cattle futures turn higher on wholesale price strength - CME
Lean hog futures settle up
3 July 2024
2 minute read
By: Chicago Mercantile Exchange (CME) live and feeder cattle futures turned higher on Tuesday, as wholesale prices continued to rally in a counter-seasonal pattern, Reuters reported, citing traders.
Meanwhile, lean hog futures also ended higher as primal cutout values firmed early in the session, government data showed.
Wholesale boxed beef prices firmed in the US Department of Agriculture's afternoon cutout report. Choice cuts were up $1.21 at $330.39 per hundredweight (cwt), while select cuts rose 7 cents to $306.48 per cwt.
While retail beef prices remain high, demand among US consumers has continued well past the point in the summer grilling season when that demand normally eases as temperatures rise, said Don Roose, president of US Commodities.
That softening normally weighs on wholesale prices, and in turn, cattle futures, he said.
"The trade thought the boxed beef prices were going to stall around Father's Day. Now, the talk is that it'll be around the Fourth of July," Roose said.
One possible driver behind that consumer demand, market analyst said, is that it can be cheaper to cook meals at home.
Recently, research conducted by Wells Fargo's Agri-Food Institute team found that it cost on average three times less to buy the ingredients to make a quarter-pound hamburger at home versus what it would cost to buy that burger at popular fast-food restaurants.
Prices in the cash cattle market are expected to be steady to higher this week, as packers prepare for a shortened holiday production schedule and have to buy up for a full production schedule next week, analysts said.
Cargill plans to resume slaughtering cattle on Friday at its Dodge City, Kansas, beef plant, after weekend rains caused a partial roof collapse, the company said on Tuesday.
CME August live cattle settled 0.82 cent higher at 185.100 cents per pound. CME August feeder cattle ended up 3.725 cents to 261.100 cents per pound.
CME August lean hog futures settled up 1.600 cents to 89.775 cents per pound.
