Chicago | Reuters — The U.S. Department of Agriculture on Tuesday raised its forecast for beef production and cattle prices in 2021 and 2022 due to strong demand and heavier livestock.
Robust sales of U.S. beef to domestic consumers and overseas buyers have helped support Chicago Mercantile Exchange (CME) cattle futures.
USDA, in a monthly report, raised its 2021 beef production forecast by 0.2 per cent from October to 27.885 billion lbs., citing larger expectations for slaughtering of fed cattle and heavier carcass weights.
The agency raised its average price estimate for cattle by 0.2 per cent to $121.31/cwt (all figures US$).
Read Also
U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
CME December live cattle futures ended up 0.1 cent at 132.2 cents/lb. on Tuesday, after rising on Monday to their highest since Sept. 3 at 132.5 cents.
The most actively traded January feeder cattle contract slipped 0.6 cent to settle at 159.8 cents/lb. The contract matched its Monday high of 160.6, which was the highest price since Oct. 27.
Traders said they are waiting to see whether cash prices for fed cattle strengthen this week as they did toward the end of last week in a sign of demand from meatpackers.
Profit margins for beef processors eased to $561 per head of cattle from $579.05 per head on Monday and $569.55 a week ago, marketing advisor HedgersEdge.com said.
Boxed beef prices slipped by 0.85 cent for choice cuts, to $287.80, and rose by $2.02, to $270.62/cwt, for select cuts, USDA said in a daily report.
“The boxed beef rally has kind of cooled off,” said Matt Wiegand, a commodity broker for FuturesOne.
For pork, USDA raised its 2021 production forecast from October and lowered its annual price forecast for hogs in the monthly report.
In CME lean hog futures, the benchmark December contract settled 1.425 cents lower at 74.95 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
