Chicago | Reuters — CME live cattle futures firmed on Monday, supported by strong packer demand that supported cash prices, indicating a bullish outlook for summer month futures, analysts said.
“Packer behaviour has been bullish for several weeks now. They are going after the cattle,” said Dennis Smith, commodity broker at Archer Financial. “I suspect it’s a combination of better-than-expected demand and lower-than-expected supply.”
Cash cattle traded steady despite a premium to the futures market, bringing $146/cwt in the northern U.S. Plains, while in the southern Plains, cash traded at $140/cwt, according to the U.S. Department of Agriculture (all figures US$).
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CME June live cattle futures settled 0.8 cent higher at 133.55 cents/lb., while August feeder cattle eased 0.475 cent to 174.225 cents/lb.
Recent rainfall across the Great Plains has greened pastureland, giving producers an incentive to graze cattle rather than sending to feedlots at a time when feed grains like corn and wheat are soaring.
“We’re getting rainfall in the dry drought areas, from Texas to Montana,” said Smith. “They can now run these cattle on grass.”
Wholesale boxed beef prices were mixed, with choice cuts adding $4.57, to $259.01/cwt, while select cuts eased 81 cents, to $244.25/cwt, according to the U.S. Department of Agriculture.
Meanwhile, lean hogs remain pressured by uncertain export demand, as China extends COVID-19 lockdowns and the nation’s attempt to rebuild its domestic hog herd after African swine fever decimated supplies in recent years.
Benchmark June lean hogs fell 2.8 cents, to 101.3 cents/lb. July hogs lost 2.85 cents, to 104.2 cents/lb.
Hog processors slaughtered 468,000 head on Monday, down from 482,000 a week earlier and 477,000 in the same period a year ago.
CME’s lean hog index, a two-day weighted average of live hog prices, fell five cents, to $100.91/cwt.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
