U.S. livestock: Live cattle futures up with boxed beef prices

Domestic consumption supportive for hogs

Chicago | Reuters — U.S. live cattle futures climbed on Thursday, supported by higher cash cattle and wholesale beef prices, traders said.

Chicago Mercantile Exchange December live cattle futures settled 0.475 cent higher at 108.35 cents/lb. (all figures US$).

CME feeder cattle futures gained 0.25 cents to end at 135.4 cents/lb.

“After four weeks in a row of lower cash cattle and lower wholesale beef prices, we see that story changing this week,” said Rich Nelson, chief strategist at Allendale, Inc.

Cash cattle were trading at $107/cwt, compared to $104-$106 last week, Nelson said.

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Wholesale beef prices strengthened for the fifth consecutive day, with choice cuts up $2.36 at $212.55/cwt on Thursday afternoon and select cuts up $1.92 at $198.97, according to USDA data.

Weekly U.S. beef export sales of 20,400 tonnes were up eight per cent from the previous week and nine per cent from the prior four-week average, with net sales of 20,400 tonnes reported for 2020, according to the U.S. Department of Agriculture, with Japan, South Korea and China the primary buyers.

Lean hog futures also gained, with the most-active December contract adding 1.075 cents to close at 67.425 cents/lb.

Despite seasonally higher hog supplies and weaker-than-expected export demand, domestic consumption is offering support, said Nelson.

“The consumer demand side is still holding on and still quite better than we expected to see,” he said. “Today’s numbers to China were moderate, but not gangbuster.”

Weekly U.S. pork export sales were up 46 per cent from the previous week and 18 per cent from the prior four-week average, with net sales of 42,200 tonnes reported for 2020, primarily to Mexico and China.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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