Chicago | Reuters – Chicago Mercantile Exchange cattle futures turned higher on Friday, as traders anticipated U.S. government reports would show tight cattle supplies.
After the market closed, the U.S. Department of Agriculture reported that the nation’s cattle herd was 94.2 million head as of July 1, a record low for that date.
In a separate report, USDA said that as of July 1, there were two per cent fewer cattle in U.S. feedlots compared to a year earlier. Analysts had expected USDA to show 0.8 per cent fewer cattle, according to a Reuters News poll.
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Still, much of the market’s attention early in the trading session was focused on U.S. President Donald Trump’s social media posts, where he said the United States would sell “so much” beef to Australia after Canberra said it would relax import restrictions.
Almost immediately, economists, market analysts, and commodity traders interviewed by Reuters questioned Trump’s assertion.
U.S. beef prices set records this year after ranchers slashed their herds due to drought that burned up pasturelands used for grazing.
Now, a ban on cattle imports from Mexico because of New World screwworm, a devastating livestock pest, and steep tariffs on Brazilian beef that are set to take effect on August 1 could further tighten U.S. meat supplies and require additional imports of Australian beef.
“Are we going to be selling a bunch of beef to Australia right now? Absolutely not,” said Dan Norcini, an independent livestock trader. “The cattle numbers just aren’t there.”
CME August live cattle futures LCQ25 settled up 0.675 cent at 226.475 cents per pound, while most-active October live cattle futures LCV25 ended up 1 cent at 223.150 cents per pound.
CME August feeder cattle futures FCQ25 ended 2.475 cents higher at 331.375 cents per pound. CME September FCU25, October FCV25 and November FCX25 feeder cattle futures set fresh contract highs during the session.
Meanwhile, lean hog futures were mostly lower, as traders are growing concerned that top-buyer Mexico will roll out retaliatory tariffs on U.S. pork next month, market analysts said.
CME August lean hog futures LHQ25 ended up 0.500 cent at 108.700 cents per pound, while most-active October LHV25 ended 0.500 cent lower at 90.600 cents per pound.
