Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose on Tuesday, rallying after a two-session slide as corn prices dropped and feeder cattle surged, but softening wholesale beef prices hung over the market, traders said.
Benchmark CME August live cattle futures settled up 1.9 cents, at 172.5 cents/lb. (all figures US$). October futures ended up 2.05 cents, at 176.075 cents.
Additional support stemmed from the cash cattle market. Fat cattle traded lightly in Kansas and the Texas Panhandle at $178-$179 per hundredweight (cwt), down a bit from last week’s average of $180, but still at a premium to August futures, at the equivalent of $172.50/cwt.
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Beef prices declined as retailers wrapped up purchases for the U.S. Independence Day holiday, the last big grilling holiday until Labour Day. The U.S. Department of Agriculture (USDA) priced choice cuts of beef on Tuesday afternoon at $329.23/cwt, down $3.81 from Monday and the lowest since June 8. Select cuts were down $1.24 at $298.43/cwt.
“It feels like the beef (market) is going to stall. But the (cattle) futures market for the summer is too low versus the cash, so we are rallying,” said Don Roose, president of Iowa-based U.S. Commodities.
Feeder cattle futures jumped as falling corn prices signaled cheaper feed costs. CME August feeders gapped higher, opening above Monday’s session high, and settled up 4.825 cents at 238.5 cents/lb.
Hog futures ended mixed on Tuesday. July hogs settled up 0.725 cent at 94.125 cents/lb. and most-active August hogs rose one cent at 91.05 cents. But October hogs fell 0.45 cent to finish at 79.775 cents.
The U.S. pork cutout rose 61 cents, to $100.16/cwt, on Tuesday afternoon.
Ahead of USDA’s quarterly hogs and pigs report on Thursday, analysts surveyed by Reuters on average expect the government to report the U.S. hog herd at 71.808 million head as of June 1, down 0.7 per cent from a year earlier.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
