U.S. livestock: CME live cattle supported by fund buying, higher cash

(CMEGroup.com)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures settled higher on Tuesday supported by fund buying and higher prices paid in the cash cattle market, traders said.

The October CME live cattle touched its highest level since Aug. 7, fuelled by the higher cash trade. The October contract traded through the 40-day moving average, which triggered some fund buying, traders said.

“The higher cash trade was a bit of a surprise on Friday. But supplies are going to stay tight, and beef demand is good,” said Lane Broadbent of KIS Futures.

Last week on Friday cash cattle, or market-ready cattle, sold in the U.S. Plains at $155-$156 per hundredweight (cwt), traders said (all figures US$) — up from the previous week’s prices of mostly $153-$155/cwt.

On Tuesday morning, the choice wholesale beef price, or cutout, rose 41 cents/cwt from Friday to $246.71. Select rose 81 cents to $235.20.

Heading into the fall, investors may begin to wonder where beef demand will come from as meat demand typically shifts to turkey and ham ahead of the holiday season, But with current constrained U.S. cattle supplies, the seasonal shift may not pressure CME live cattle futures much, Broadbent said.

October live cattle settled at 151.425 cents per pound, up one cent. December live cattle settled at 155.525 cents/lb., up 1.575 cents.

CME feeder cattle followed live cattle futures higher, settling at its highest level since Aug. 5. CME September feeder cattle closed at 220.25 cents/lb., up 1.6 cents.

Hogs finish higher

Front-month CME October hogs touched its three-cent trading limit early on Tuesday, but later retreated to settle higher on the day, supported by short-covering and seasonal buy recommendations, traders said.

CME October hogs closed 1.75 cents/lb. higher at 99.875 cents. CME December hogs closed at 93.4 cents, up 1.4 cents.

Tuesday morning’s wholesale pork price slid 18 cents/cwt from Friday to $101.54, USDA said. Among the biggest drop in wholesale prices were hams at $94.50/cwt, down $2.37 from Friday.

“Hams have dropped about 50 cents/lb. in a relatively short time, and that is a huge break in price. We’ve had a substantial break in the price of these wholesale pork products, which may lead to more demand from wholesale buyers,” said Dan Norcini, an independent livestock futures trader.

— Meredith Davis reports on ag commodity markets for Reuters from Chicago.

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