Chicago | Reuters — Chicago Mercantile Exchange live cattle futures advanced on Tuesday, supported by increasing beef prices, traders said.
Beef prices usually rise heading into Labour Day, and there is a feeling the market has bottomed after recent volatility, said Don Roose, president of Iowa-based broker U.S. Commodities.
Prices for choice cuts of boxed beef rose by $1.15 to $208.35/cwt, while select cuts increased by $2.74, to $196.67/cwt, according to the U.S. Department of Agriculture (all figures US$).
The coronavirus pandemic prompted consumers to hoard meat this spring while meatpackers like JBS USA and Tyson Foods temporarily shut slaughterhouses to contain outbreaks among workers. The plant closures in April tanked prices for cattle.
Cash cattle prices are expected to rise by $1-$2/cwt this week, Roose said.
“We’re trying to move higher,” he said.
CME October live cattle rose 1.15 cents to end at 108.3 cents/lb. September feeder cattle jumped 1.225 cents, to 146.625 cents/lb.
CME October lean hog futures settled two cents lower at 51.825 cents/lb. The market retreated after setting a two-month high on Monday, traders said.
Traders on Wednesday will review monthly USDA data for updates on meat supplies and demand and check data on crops used for livestock feed.
Supplies of U.S. hogs remain too large after producers expanded their herds in recent years, analysts said. Farmers hope that China, the world’s top pork consumer, further ramps up imports from the United States.
China is continuing to buy U.S. goods, particularly commodities, under its Phase One trade deal with the United States, despite rising tensions, top White House economic adviser Larry Kudlow said.
China’s WH Group, owner of Smithfield Foods, said it expects U.S. pork exports to China to fall in the second half, as the pandemic hit volumes handled at U.S. processing plants and pushed up prices.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.