Chicago | Reuters –– Live cattle futures on the Chicago Mercantile Exchange jumped to a two-month high on Thursday, led by firming cash cattle markets and optimism about a seasonal climb in U.S. beef demand as the summer grilling season nears, traders said.
CME June live cattle futures settled up 1.275 cents at 139.9 cents/lb. after reaching 139.95, the contract’s highest since Feb. 24 (all figures US$).
CME May feeder cattle futures ended up 2.375 cents at 164.85 cents/lb., drawing additional support as corn futures backed down from multi-year highs.
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Market-ready cattle traded this week in Iowa and Nebraska cash markets at $146 per hundredweight with talk of a few trades as high as $147, up from trades around $138 in early April.
Farther south, fat cattle changed hands this week mostly at $140/cwt, still up $1 from last week.
“You are seeing (meat) packers put better money on the table for cash cattle, and the futures are playing catch-up,” said Dan Norcini, an independent livestock trader.
“We are getting into a higher beef demand period, and the weights on cattle are coming down. The leverage has shifted away from the packers,” he added.
Boxed beef prices were mixed. Choice cuts rose $1.35, to $270.17/cwt, while select cuts fell 85 cents, to $255.68/cwt, the U.S. Department of Agriculture said.
Traders await Friday’s monthly USDA Cattle on Feed report. Analysts surveyed by Reuters on average expect the government to show that feedlot placements in March fell 7.8 per cent from a year earlier and marketings dropped 1.8 per cent.
Hog futures fell for a third straight session on disappointing pork export sales and ideas that futures were overpriced relative to cash hog prices.
Benchmark June lean hogs settled down 1.575 cents at 117.175 cents/lb.
USDA reported export sales of U.S. pork in the week ended April 14 at 12,900 tonnes, a marketing year low that was down 55 per cent from the prior four-week average. Weekly beef sales totaled 15,000 tonnes, down 27 per cent from the prior four-week average.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
