Chicago | Reuters — U.S. live cattle futures closed modestly higher on Friday, supported by strength in cash cattle markets this week, but uncertainty about beef demand in the coming months capped rallies, analysts said.
Chicago Mercantile Exchange October live cattle futures settled up 0.575 cent at 107.35 cents/lb. and December rose 0.525 cent to end at 111.85 cents (all figures US$).
CME October feeder cattle settled up 0.975 cent at 142.425 cents/lb.
Firmer cash cattle trade set the tone this week, with fat cattle changing hands mostly at $103-$103.50/cwt, up about $2 from the bulk of last week’s trade.
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But worries about beef demand lingered, given uncertainty about how the restaurant and food service sectors would fare in colder months due to coronavirus-related limits on indoor dining.
“Nobody knows how the restaurant business is going to be over the winter, and what the export business is going to be. It’s a bit of a wait-and-see on how demand develops,” said Altin Kalo, agricultural economist for Steiner Consulting.
Boxed beef prices firmed slightly on Friday afternoon, with choice cuts up 59 cents at $215.64/cwt, according to U.S. Department of Agriculture data.
Lean hog futures closed narrowly mixed, with nearby contracts drifting lower following a recent run-up tied to an outbreak of African swine fever in Germany, a factor that should boost export demand for U.S. pork.
Another six cases of the disease were confirmed in wild boars in eastern Germany, the agriculture ministry said Friday.
Hog traders headed to the sidelines as they booked profits and awaited USDA’s quarterly Hogs and Pigs report on Sept. 24, and worried about the availability of labour at meat packing plants.
“You can have all that demand, (but) if you can’t get the hogs slaughtered, it’s still a challenge,” Kalo said.
CME October lean hog futures settled down 0.025 cent at 66.5 cents/lb. and most-active December hogs ended down 0.1 cent at 63.525 cents/lb.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
