Chicago | Reuters — Chicago Mercantile Exchange cattle futures firmed on Friday as daily processing levels began to rebound, a sign that COVID-related staffing woes may be easing, traders said.
Meatpackers have struggled with staffing shortages due to the surge in Omicron coronavirus infections, traders said, limiting production in recent weeks.
Beef processors slaughtered an estimated 117,000 cattle on Friday, up from 114,000 cattle a week ago and down from 120,000 cattle a year ago, the U.S. Department of Agriculture (USDA) said.
For the week ended Friday, beef processors slaughtered an estimated 586,000 cattle, up from 575,000 cattle in the previous week — but down from the same period a year earlier.
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U.S. livestock: Feeder cattle extend rally to new highs
Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.
“The estimates for this week’s cash cattle trade remained steady, but the market is expecting a smaller set-up in the number of cattle offered,” said Rich Nelson, chief strategist for commodities brokerage Allendale.
Traders are also anticipating the next USDA cattle report, slated to be released on Monday, which will give investors an update on the domestic supply of market cattle.
Nelson said many traders are anticipating that cattle supplies will continue to decline, “and I think that we’ll see the lowest beef cow and calf crop in six years.”
The choice boxed beef cutout rose by $1.31 on Friday, to $290.42/cwt, while the select cutout jumped $4.31, to $283.41/cwt, according to USDA (all figures US$).
CME April live cattle futures settled up 1.475 cent at 143.1 cents/lb.
March feeder cattle futures ended 0.125 cent higher at 159.625 cents/lb.
Hog futures also rose on Friday, bolstered by technical buying, a firm cash market and tight supplies, traders said.
Pork processors slaughtered 468,000 hogs on Friday, up from 445,000 hogs a week ago and down from 486,000 hogs last year, according to USDA.
April lean hogs finished up 0.25 cent at 94.925 cents/lb.
— Reporting for Reuters by P.J. Huffstutter in Chicago.
