Chicago | Reuters—Chicago Mercantile Exchange live cattle and feeder cattle futures set record highs on Wednesday as cash prices stayed strong, along with consumers’ demand for beef, brokers said.
Prices for cattle and beef have soared after ranchers slashed their herds to the lowest level in decades due to a savage drought that dried up pastures used for grazing.
Beef supplies were expected to tighten further after U.S. President Donald Trump slapped a 50 per cent tariff on most Brazilian goods, including beef, analysts said. The United States has increasingly relied on imports of Brazilian lean beef, used to make hamburgers, due to low domestic inventories.
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U.S. beef processors continued to pay steep prices for cattle in the cash market, brokers said, adding that futures remained too low compared to cash prices.
August live cattle futures LCQ25 settled up 3.350 cents at 233.075 cents per pound after posting a contract high of 233.750 cents. That was the highest-ever price on a continuous chart LCc1 of the front cattle futures contract.
Most-active October live cattle LCV25 ended up 3.275 cents at 229.725 cents after reaching a contract high of 230.425 cents.
The rallies were the latest in a string of recent highs.
“Momentum is up,” said Matt Wiegand, commodity broker for FuturesOne. “It is pretty wildly overbought.”
CME September feeder cattle futures FCU25 ended up 2.675 cents at 339.750 cents per pound after reaching 340.600 cents. Front-month August feeders FCQ25 set the highest-ever price on a continuous chart FCc1 of the nearby futures contract.
The U.S. Department of Agriculture on Friday confirmed the U.S. cattle herd dropped to 94.2 million head by July 1, a record low for that date, while the number of cattle placed in U.S. feedlots during June fell by eight per cent compared to a year earlier, a bigger-than-expected drop.
Wholesale beef prices eased on Wednesday, with choice cuts sliding $2.20 to $361.99 per hundredweight (cwt), according to the USDA.
The agency priced the hog carcass cutout at $116 per cwt, up slightly from Tuesday.
CME August lean hog futures LHQ25 settled down 0.225 cent at 107.025 cents per pound, while most-active October hogs LHV25 ended up 0.475 cent at 89.2 cents per pound.
—Prices in USD
