Beef demand drives up U.S. live cattle futures

Chicago Mercantile Exchange (CME) live cattle futures rose on Monday driven in part by a five-year high in weekly U.S. beef exports, traders and analysts said.

The turnaround in wholesale beef values on Monday also contributed to futures’ gains, they said.

U.S. Department of Agriculture on Monday reported last week’s beef exports at roughly 27,000 tonnes, eclipsing the previous high of around 21,100 tonnes during the first week of February 2013. Monday’s beef exports were the most since USDA began issuing the report in 2008.

Separate government data showed the wholesale price of choice beef on Monday morning at $201.33 per hundredweight (cwt). That was up $1.80 from Friday but down $1.76 from a week ago (all figures US$).

“Apparently the recent (lower) beef price levels have attracted some export interest,” Livestock Marketing Information Center director Jim Robb said.

Monday’s higher beef cutout which reflected the stronger-than-expected beef exports, he said.

Investors attributed some of futures’ abrupt mid-morning upswing to buy stops. Also, subsequent advances lifted August past 10-day and 20-day moving averages of 119.31 and 119.404, respectively, which triggered fund buying.

Still, uncertainty about cash cattle prices and near-term wholesale beef demand pulled futures down from morning highs.

There was nothing fundamental to justify futures going lower and no reason to push the market higher given seasonally weak beef prices, said Don Roose, analyst at U.S. Commodities.

CME live cattle June finished at 119.825 cents, up 0.825 cent/lb., and August at 119.25 cents, up 0.925 cent.

Feeder cattle futures were pulled higher CME live cattle and fund buying.

August feeder cattle closed at 144.525 cents, 1.125 cents/lb. higher. September settled at 147 cents, up 0.775 cent.

Hogs slip with cash

CME hogs posted modest losses on profit taking in anticipation of lower cash hog prices, traders and analysts said.

USDA data showed the average hog price on Monday morning in the eastern Midwest market was down $1.69 per cwt from Friday at $99.01.

“Cash prices could work lower this week but there is still some Fourth of July pork business that needs to be taken care of,” said independent hog futures trader Jim Burns.

The government’s Monday morning mandatory wholesale pork price was $103.89/cwt, up $1.19 from Friday.

Despite seasonally tight hog supplies, more animals are coming to market as producers take advantage of current cash prices, analysts and traders said.

Meanwhile, supermarkets and restaurants are buying pork for U.S. Fourth of July cookouts.

CME June hogs settled down 0.075 cent to 97.95 cents/lb. and July closed down 0.1 cent at 96.65 cents.

— Theopolis Waters reports for Reuters from Chicago.

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