Chicago | Reuters – Chicago Mercantile Exchange spot live cattle futures rose on Tuesday, as the northern cash market continued to trade at a record premium over the south amid drought-hit grazing grounds, traders said.
But CME’s benchmark August live cattle futures LCQ2 and deferred contracts slipped on worries about the health of the U.S. economy, and signs that global crop problems point to consumers facing years of high food prices.
Livestock futures are continuing to feel the pressure of the seasonal slide in wholesale pork and beef prices, traders said. Retailers tend to finish stocking their meat cases for the Fourth of July weekend, and the next big grilling holiday isn’t until Labor Day in early September.
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Lean hog futures were mixed, as traders positioned ahead of the U.S. Department of Agriculture’s quarterly Hogs and Pigs report due Wednesday.
One main question for traders is whether the report will show any hints that producers are trying to expand their hog operations, said Don Roose, president of Iowa-based U.S. Commodities.
“It’s a tough issue to predict, given high prices of grain, high prices of building material costs and the interest rates are on the rise,” Roose said.
Beef packer margins jumped to $164.20 per cwt for cattle on Tuesday, up from $137.20 a day earlier and $145.90 the previous week, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
August live cattle futures LCQ2 settled down 0.750 cent at 132.725 cents per pound. The spot June LCM2 contract, which expires on Thursday, crept up 0.050 cent to finish at 136.300 cents.
CME August feeder cattle FCQ2 settled down 2.300 cents at 171.825 cents per pound, pressured by rising corn futures that indicated higher feed costs. COR/
CME most-active August lean hog futures LHQ2 settled down 1.050 cents at 103.825 cents per pound. Front-month July hogs LHN2 dropped 0.250 cent to 109.925 cents.
