Chicago | Reuters — U.S. live cattle futures closed mixed on Wednesday, with the benchmark June contract easing in a light round of profit-taking while robust beef prices continued to underpin the market, traders said.
Chicago Mercantile Exchange June live cattle futures settled down 0.025 cent at 118.6 cents/lb., retreating after a climb to 119.425 cents, a three-week top near the contract’s 50-day moving average (all figures US$).
Back-months closed mostly higher, with August up 0.275 cent at 122.325 cents.
In the wholesale beef market, choice cuts rose by $2.71 on Wednesday to $315.08 per hundredweight (cwt), the highest in nearly a year, while select cuts rose 82 cents, to $297.16/cwt, according to the U.S. Department of Agriculture.
Analysts attributed the two-month climb in beef prices to the approach of the U.S. summer grilling season, coupled with the reopening of restaurants following the coronavirus pandemic and consumers flush with U.S. government stimulus funds.
“Demand (for beef) is just off the charts,” said Don Roose, president of Iowa-based U.S. Commodities. However, he cautioned, prices may cool soon as retailers finish stocking meat cases ahead of the U.S. Memorial Day weekend later this month and Father’s Day on June 20.
“Some of these (retail buying) programs might be coming to an end. The beef market feels like you’re getting into areas where there is some resistance,” Roose said.
Meanwhile, CME feeder cattle futures jumped one per cent to a two-week high, buoyed by a setback in the corn market that eased concerns about rising costs for feedgrains.
August feeders settled up 1.675 cents at 150.525 cents/lb.
CME lean hog futures ended modestly higher, rebounding after a three-session slide on bargain-buying and tight U.S. supplies that have lifted cash hog prices, traders said.
CME June hogs settled up 0.85 cent at 112.025 cents/lb.
Traders await USDA’s weekly export sales report on Thursday that should detail sales of U.S. pork and beef in the week ended May 6.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.