Chicago | Reuters — Chicago Mercantile Exchange live cattle closed higher for a second session on Wednesday, lifted by strength in the cash market tied to tightening U.S. cattle supplies, traders said, while tumbling corn prices lifted feeder cattle futures.
CME August live cattle futures settled up 1.375 cents at 173.875 cents/lb. (all figures US$). October futures ended up 0.95 cent at 177.025 cents.
CME August feeders settled up 1.75 cents at 240.25 cents/lb.
Market-ready cattle traded lightly in Kansas this week at $178 per hundredweight (cwt), down a bit from last week’s average of $180, but above August futures, which closed at the equivalent of roughly $174/cwt.
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“Cattle futures, especially the August, are still at a discount to the cash market … and the long-term outlook is for U.S. cattle supplies to continue to decline next year, forcing prices higher,” said Doug Houghton, analyst for Brock Associates.
Wholesale beef prices continued their seasonal summer retreat. The U.S. Department of Agriculture (USDA) priced choice cuts of beef on Wednesday afternoon at $327.90/cwt, down $1.33 from Tuesday, while select cuts were down $1.75, at $296.68/cwt.
Hog futures ended narrowly mixed on Wednesday as traders squared positions ahead of the USDA’s quarterly hogs and pigs report, which is due after Thursday’s close. Benchmark August hogs settled Wednesday up 0.05 cent at 91.1 cents/lb., while October hogs fell 0.4 cent to end at 79.375 cents.
Ahead of USDA’s report, analysts surveyed by Reuters on average expect the government to report a slight decline in the size of the U.S. hog herd to 71.808 million head as of June 1, down 0.7 per cent from a year earlier.
The U.S. pork cutout fell $1.08 on Wednesday afternoon to $99.08/cwt, retreating from a near eight-month high set a day earlier at $100.16.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
