Chicago | Reuters — Chicago Mercantile Exchange feeder cattle futures jumped to a new contract high on Monday on firm cash prices and increasing concerns about reduced U.S. herd numbers, analysts said.
Traders focused on tighter cattle supplies as demand from meatpackers for livestock to slaughter remained strong. Ranchers have reduced herd sizes due to a drought in the western U.S.
“The numbers are tight and will still be tightening for a while on the feeder cattle,” said Matt Wiegand, commodity broker for FuturesOne.
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Packers slaughtered an estimated 125,000 cattle on Monday, up from 124,000 cattle a week earlier and 122,00 cattle a year ago, according to the U.S. Department of Agriculture.
CME April feeder cattle futures finished 2.575 cents higher at 198.6 cents and set a contract high of 199.1 cents (all figures US$).
Declining grain futures helped support the rally by signaling cheaper costs for livestock feeder, traders said.
Live cattle futures also rose, with the most-active April contract ending 0.675 cent higher at 166.1 cents/lb.
“We’re trying to decide where the market has enough premium priced in for the tightening numbers,” Wiegand said
Wholesale boxed beef prices were mixed. Choice cuts gained 88 cents to $290.20 per cwt, according to USDA data. Select cuts were priced $276.47/cwt, 39 cents lower than Thursday.
In the pork market, CME April lean hogs fell 1.075 cents to settle at 83.475 cents/lb.
In other news, meat labeled as a U.S. product must come from animals raised and slaughtered within the country under a rule proposed by the Biden administration, in a victory for U.S. farmers who had lobbied for the change.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
