U.S. livestock: Live cattle firm on economic optimism

CME lean hogs close mostly higher

CME December 2020 live cattle with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures firmed for a second day on Thursday on technical buying and optimism that the U.S. economy may be on the upswing, analysts said.

However, gains in nearby contracts trailed those in deferred months as a backlog of market-ready cattle and falling wholesale beef prices hung over the market.

CME June live cattle futures settled up 0.275 cent at 95.725 cents/lb. and benchmark August rose 0.575 cent at 97.925 cents, while the December contract ended up 1.05 cents at 105.025 cents (all figures US$).

CME August feeder cattle futures closed up 0.5 cent at 134.725 cents/lb.

“The overall economic optimism right now is helping,” said Doug Houghton, analyst at Brock Capital Management.

Cash cattle traded as low as $105 per hundredweight in the southern Plains on Thursday, USDA reported, down $5-$12/cwt from a day earlier. Yet the cash price represented a significant premium over nearby futures, a factor that supported the spot June contract.

Still, wholesale beef prices continued to retreat from last month’s record highs as the U.S. slaughter pace recovered, generating more beef supplies.

CME lean hog futures closed mostly higher, although like cattle, nearby contracts were pressured by a back-up of hogs awaiting slaughter.

CME June lean hogs ended down 0.225 cent at 48.425 cents/lb. while most-active July futures settled up 0.1 cent at 53.575 cents.

The U.S. Department of Agriculture reported export sales of U.S. pork in the week ended May 28 at 17,300 tonnes, including 3,400 tonnes sold to top global buyer China.

“The market is kind of disappointed with that,” Houghton said. U.S. pork sales to China slowed in May after record sales in the first quarter of the year.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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