Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange rebounded from prior-session losses on Friday, supported by signs of improving cash cattle prices and firming wholesale beef values, traders said.
Prices, however, continued to struggle to break out of their recent trading range as concerns about slowing global economic growth and rising COVID-19 cases hung over the market.
Cash cattle at feedlot markets in the southern Plains traded this week at prices roughly steady with recent weeks. But in the central Plains, fed cattle traded higher this week, and cash prices are expected to continue to improve over coming weeks.
“Higher futures today were largely a rebound from yesterday’s general commodity-wide selloff. Also, everyone is expecting this weak cash cattle market to transition to higher prices next month,” said Rich Nelson, chief strategist with Allendale Inc.
Wholesale choice boxed beef rose $3.43 on Friday to $345.06/cwt while select cuts gained $2.12, to $318.53/cwt, the highest levels in about 14 months, U.S. Department of Agriculture (USDA) data showed (all figures US$).
Beef packer margins remained near historic highs at $991 per head, up from $832.60 a week ago, according to livestock marketing advisory service HedgersEdge.com.
Benchmark CME October live cattle settled 0.9 cent higher at 129.05 cents/lb. September feeder cattle futures ended up 2.6 cents at 165.5 cents/lb.
After the close, USDA, in its monthly cattle-on-feed report, said Aug. 1 supplies were down 1.9 per cent from a year earlier, while July cattle placements were smaller than expected at 8.1 per cent below last year.
CME lean hog futures also firmed on Friday, reversing losses from a day earlier.
Benchmark October lean hog futures settled up 1.7 cents at 88.625 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.