Chicago | Reuters – Chicago Mercantile Exchange live cattle futures topped a three-week high on Monday on expectations that supplies will tighten in the coming months, while feeder cattle set a contract high, traders said.
The U.S. Department of Agriculture, in a monthly report issued after the markets closed on Friday, said 1.67 million cattle were placed in domestic feedlots in June, down 7.1 percent from a year earlier. Analysts surveyed by Reuters had only been expecting a 4.1 percent drop from 2020.
The lower-than-expected placements provide a signal that fewer cattle will be marketed about three to eight months in the future, analysts said.
“Everybody knew the numbers would eventually get tighter,” said Matt Wiegand, commodity broker for FuturesOne. “Now we finally saw it.”
Most actively traded CME October live cattle futures ended up 2.050 cents at 129.200 cents per pound and touched their highest price since July 2. Nearby August live cattle gained 1.950 cents to close at 123.450 cents.
CME August feeder cattle finished 2.125 cents higher at 162.200 cents per pound and set a contract high of 163.150 cents per pound.
A decline in prices for corn and soybeans used for livestock feed helped support feeder cattle futures, traders said.
Choice cuts of wholesale boxed beef rose $1.30 cents to $267.93 per cwt, while select cuts increased 98 cents to $250.92 per cwt, according to the U.S. Department of Agriculture.
“We’ve seen boxed beef stop going down,” Wiegand said.
In the pork market, CME August lean hog futures edged up 0.050 cent to 107.400 cents per pound and reached its highest price since June 18 at 107.725 cents.
Most-active October hogs closed up 0.475 cent at 93.100 cents and stayed within the trading range from Friday, when the contract touched its highest price since June 16.