Chicago | Reuters — Chicago Mercantile Exchange cattle futures firmed on Tuesday, amid ongoing concern over animal weights shrinking and a steady stream of heifers being sent to slaughter, traders said.
Rising cash cattle prices also gave the beef market a boost on the day, traders said.
The U.S. Department of Agriculture said meat processors slaughtered an estimated 127,000 cattle on Tuesday, down slightly from a week ago — but up from a year ago. Hog slaughtering on Tuesday was also slightly down from a week earlier.
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Meanwhile, beef packer margins remained in the red on Tuesday, and USDA reported that prices of wholesale choice and select boxed beef cuts were up.
“You’re seeing price shock with U.S. consumers,” said Karl Setzer, partner at Consus Ag Consulting. “You go to the store and you ask, ‘How can you afford hamburger if you’re working a minimum wage job?’ And the answer is, they can’t.”
In the hog market, December and February lean hog futures dipped to new contract lows as lacklustre export and domestic demand for U.S. pork continued to hang over the market, analysts said.
The price dip also reflected a seasonal pattern, analysts said, as hog futures also tend to decline in the fall as pigs fatten up on newly harvested corn.
Farmers have harvested 45 per cent of their corn crop so far this autumn, above the five-year average of 42 per cent, USDA reported late Monday afternoon.
CME December lean hog futures ended down 0.75 cent at 67.55 cents/lb., and hit a new contract low of 67.3 cents during the session (all figures US$).
CME December live cattle futures settled up 0.325 cent at 186.875 cents/lb.
November feeder cattle futures ended 0.525 cent higher at 250.45 cents/lb., while most-active January feeder cattle settled up 1.275 cents at 252.8 cents/lb.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.
