Chicago | Reuters – Chicago Mercantile Exchange live cattle futures rose and feeder cattle touched a two-month high on Friday on technical trading, with stronger-than-expected September jobs data indicating good consumer demand, analysts said.
Hog futures touched their highest level in four months before retreating.
Benchmark CME December live cattle futures LCZ24 settled up 0.600 cent at 187.000 cents per pound. CME November feeder cattle futures FCX24 ended up 1.150 cents at 249.275 cents per pound and hit their highest price since Aug. 1.
“The market is extremely overbought, technically,” said Cassie Fish, analyst and author of the Beef blog. She added that managed funds have been buying in significant amounts.
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Fish said the better-than-expected September jobs data lent support to the cattle market.
Nonfarm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 in August. Economists polled by Reuters had forecast payrolls rising by 140,000 positions.
With retail beef prices high, Fish said, encouraging economic news is supportive to cattle prices.
“People have got to be working if they’re going to pay the most they’ve ever paid,” she said.
Fish said there have been production reductions by meat packers, which appear to be stabilizing boxed beef prices. Packer margins are still in the red, spurring that reduction.
“The talk is that we’re going to see even bigger production reductions in the next three weeks,” Fish said.
The U.S. Department of Agriculture priced choice cuts of boxed beef on Friday at $302.36 per hundredweight (cwt), up $2.56 from Thursday. Select cuts rose $3.85 to $287.14 per cwt.
Meanwhile, cattle feeders are in a standoff with packers that buy their livestock, said Fish.
“The cattle feeder feels like he has the advantage,” she said, holding out for more money after the week’s futures rally, which also provided support.
CME December lean hog futures LHZ24 lost 0.250 cent to end at 76.150 cents per pound after earlier touching their highest price since May. Nearby October hogs LHV24 ended down 0.150 cent at 84.025 cents.
