Live cattle futures hit one-week high as packer margins rise - CME
October hog futures settle down
13 September 2024
2 minute read
By: Chicago Mercantile Exchange (CME) live cattle futures set a one-week high on Thursday, supported by strength in equity markets and improving packer margins that should boost demand for slaughter-ready cattle, Reuters reported, citing brokers.
CME October live cattle futures settled up 1.075 cents at 178.025 cents per pound after rising to 178.800, the contract's highest since Sept. 5.
October feeder cattle ended up 2.250 cents at 239.750 cents per pound after reaching 240.575 cents, a nearly one-month top.
"The speculation out there is that packer margins are still better than people expected, so the thinking is that the slaughter numbers for next week are probably going to be a little bit higher," said Altin Kalo, agricultural economist for Steiner Consulting.
Packer margins fell on Thursday but were still above $50 per head of cattle, according to livestock marketing advisory service HedgersEdge, after trading in negative territory as recently as late August.
Meanwhile, Wall Street's main indexes closed higher after the latest inflation data reinforced expectations for a 25-basis point rate cut by the Federal Reserve. And the dollar fell, typically a supportive factor for commodities.
"You had the dollar breaking lower. That was a little bit supportive across all classes today," said Matt Wiegand, a broker with FuturesOne.
Packers slaughtered an estimated 123,000 cattle on Thursday, compared to 124,000 cattle a week ago and 124,522 cattle a year ago, the US Department of Agriculture said. Boxed beef prices fell for choice cuts by 18 cents to $307.18 per cwt, the government said.
In the hog market, CME lean hog futures closed lower on expectations for a seasonal increase in the US hog slaughter pace over the next few weeks that should put more pork on the market at a time when average hog weights are higher than a year ago.
October hog futures settled down 0.850 cent at 78.900 cents per pound and December ended down 0.750 cent at 71.550 cents.
"You are going to need lower (pork) prices to move this volume. The market is coming around to that view," Kalo said.
