Chicago | Reuters — Chicago Mercantile Exchange (CME) live cattle futures rose more than two per cent on Tuesday, setting a two-month high as deferred prices for corn, the main feed grain for cattle, continued to fall, traders said.
CME benchmark August live cattle futures settled up 2.625 cents at 123.9 cents/lb. after reaching 124.125 cents, the contract’s highest since notching a life-of-contract top on April 8 (all figures US$).
Feeder cattle futures hit a three-week high. August feeders ended up 2.225 cents to settle at 156.825 cents/lb.
“Cheap feed prices support the cattle market, while the hog market is lower on a fifth day of lower (pork) product prices,” Arlan Suderman, StoneX chief commodities economist, wrote in a note to clients.
Tuesday’s higher close in cattle futures came despite another daily setback in wholesale beef prices, which have cooled this month following a three-month run-up. The choice boxed beef cutout value fell $1.04 on Tuesday, to $334.43/cwt, and select cuts dropped $5.13, to $298.28/cwt, according to the U.S. Department of Agriculture (USDA).
CME lean hog futures closed narrowly mixed. July lean hog futures settled up 0.275 cent at 118.5 cents/lb., while August futures fell 0.1 cent to end at 114.7 cents.
Worries about softening demand for U.S. pork hung over the market.
“U.S. pork exports have started to slow in recent weeks, especially to China,” Karl Setzer, a commodity risk analyst with AgriVisor, wrote in a client note.
Meanwhile, on Capitol Hill, U.S. Agriculture Secretary Tom Vilsack threw his support behind a proposal to establish a special investigator to address concerns about anti-competitive practices in the meat and poultry industries.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.