US cattle futures leap to contract highs - CME
April lean hog futures end up
7 April 2023
2 minute read
By: Chicago Mercantile Exchange (CME) live cattle futures leapt to contract highs on Thursday as cash prices soared, stoking concerns about tightening US supplies, reported Reuters.
Meatpackers had to be aggressive in the cash market, brokers said, after ranchers have reduced their herds due to high feed costs and drought in the western US.
Cattle have sold for $177 to $178 per hundredweight in the cash market in Nebraska since futures markets closed on Wednesday, up from about $170 per hundredweight last week, said Rich Nelson, chief strategist for commodity broker Allendale.
"We had a cash cattle market explode, specifically for the north," Nelson said. "I certainly was quite surprised."
CME April live cattle futures ended up 2.675 cents at 171.075 cents per pound, after setting a contract high of 171.425 cents per pound. June live cattle finished 2.800 cents higher at 163.100 cents per pound and reached a contract high of 163.225 cents per pound.
Further gains in futures will be led by cash prices, Cassie Fish, an analyst and beef industry expert, said on The Beef blog. She predicted wholesale beef prices will have the next sharply higher move of values.
"Packers scrambled to cover needs from a pool of market-ready fed cattle too small to supply them," Fish said.
Prices for choice cuts of beef shipped to wholesale buyers in large boxes rose $1.03 on Thursday to $289.65 per hundredweight, while prices for select cuts declined, the US Department of Agriculture (USDA) data showed.
Packers slaughtered an estimated 122,000 cattle, compared with 126,000 cattle a week ago and 121,000 cattle a year ago, the USDA said separately.
"It appears that packers remain short bought and we can probably say the same thing for beef buyers," Steiner Consulting Group said.
CME feeder cattle futures also climbed, with the May contract settling up 3.300 cents at 205.400 cents per pound.
CME April lean hog futures ended up 0.750 cent at 74.150 cents per pound, after setting contract lows this week.
