Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose on Thursday, with several back months hitting new life-of-contract highs on thin trading, as domestic demand for beef this summer continues to be stronger than expected, traders said.
Meanwhile, lean hog futures rose — with the October and December contracts hitting new life-of-contract high — on firm demand and signs that U.S. inflation may be easing, traders said.
U.S. producer prices unexpectedly fell in July amid a drop in the cost of energy products and underlying producer inflation appears to be on a downward trend, though jobless claims rose for a second straight week in a labour market that remains tight.
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“The one thing we have on the cattle market is that we’ve probably hit our seasonal peak on the production side of the market,” said Don Roose, president of Iowa-based U.S. Commodities. “But as we head into the fourth quarter, we’re still not seeing signs of an expansion phase in cattle — and demand is remaining strong.”
CME August lean hogs settled up 0.15 cent at 122.4 cents/lb., while benchmark October rose 0.225 cents to end at 101.075 cents.
Traders said the market still sees the October hogs contract as underpriced relative to the August, which expires next week. Wholesale pork prices have inched lower in recent days but remain near their highs for 2022.
CME August live cattle futures settled up 1.4 cents at 140.6 cents/lb., while most-active October rose 0.625 cent at 145.1 cents. September feeder cattle futures settled down 0.4 cent at 184.6 cents/lb.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.
