Chicago | Reuters — U.S. live cattle futures rose on Tuesday, reaching one-week highs in a rebound from losses last week, as traders noted that meat companies have been slaughtering more livestock.
The number of livestock being killed each day has recovered from April and May, when processors temporarily shut slaughterhouses due to massive outbreaks of the new coronavirus among employees.
Meatpacking plants have resumed operations, albeit many at reduced capacity. Farmers still face a backlog of livestock after animals could not be slaughtered during the height of plant disruptions, analysts said.
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“There’s still not space for everybody who wants to send cattle at a given time,” said Matt Wiegand, broker for FuturesOne. “It’s still not a 100 per cent functioning market.”
Processors slaughtered an estimated 117,000 cattle on Monday, up from 116,000 a week earlier and down from 122,000 a year ago, according to the U.S. Department of Agriculture. In March, prior to the plant shutdowns, they were killing up to 124,000 a day.
Meatpackers slaughtered 450,000 hogs on Monday, up from 417,000 a week ago and down from 472,000 a year earlier, the USDA said. In March, they slaughtered up to 498,000 a day.
Across the processing sector for cattle, hogs and chickens, facilities are operating at more than 95 per cent of their average capacity compared to a year ago, according to USDA.
Chicago Mercantile Exchange (CME) June live cattle futures settled up 2.2 cents at 96.325 cents/lb. (all figures US$). Benchmark August jumped 1.475 cents to 97.8 cents and set a one-week high, after hitting a one-month low on Friday.
CME August feeder cattle futures closed 1.175 cents higher at 134.25 cents/lb.
“A lot of it is bouncing back within the range,” Wiegand said.
CME June lean hogs slipped 0.5 cent to 48.075 cent/lb., while most-active July futures fell one cent to 52.975 cents.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
