Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange rose on Friday ahead of a long U.S. holiday weekend, supported by strong beef prices and profitable margins for beef packers, traders said.
CME’s benchmark August live cattle contract settled up 0.65 cent at 171.725 cents/lb. (all figures US$).
The U.S. Department of Agriculture priced choice cuts of beef at $343.09 per hundredweight (cwt) on Friday afternoon, up $1.02 from Thursday and the highest since August 2021. Beef prices continue to climb, even though retailers should be nearly finished stocking meat cases ahead of the U.S. Independence Day holiday, the last big grilling holiday until Labour Day in September.
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The higher trend in beef prices “makes it harder for the packers to talk the market down,” said Altin Kalo with Steiner Consulting Group. “So far, the feedlots have been successful in holding out and getting paid for cattle,” Kalo said.
Profit margins for meat packers rose on Friday to $166.65 per head of cattle, up from $145.85 on Thursday and $130.85 a week ago, according to livestock marketing advisory service HedgersEdge.
CME feeder cattle futures also rose on Friday, shrugging off pressure from a surge in corn prices, which tends to signal higher feed costs. August feeders ended up 0.8 cent at 234.925 cents/lb.
Feeder cattle supplies are tight, analysts said, as rain in the U.S. Plains has spurred pasture growth and enabled cattle producers to keep more feeders out of marketing channels.
Hog futures closed mixed, with the most-active nearby contracts closing higher while deferred contracts declined.
CME July hogs settled up 0.925 cent at 92.85 cents/lb., staying inside of Thursday’s trading range, while August hogs ended up 0.375 cent at 90.675 cents/lb.
USDA priced the pork carcass cutout at $92.33/cwt on Thursday afternoon, up $1.44 from Thursday and the highest since mid-November.
U.S. markets will be closed on Monday for the Juneteenth federal holiday.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
