CME update: live cattle futures reach four-month high

Live cattle futures on the CME rose on 16 July to four-month highs as steady to firmer cash cattle prices indicate progress in the cattle backlog.
calendar icon 17 July 2020
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Reuters reports that the firmer cash cattle prices signalled that meat packers may have worked through the backlog of market-ready cattle that built up this spring.

CME August live cattle futures settled up 1.975 cents at 103.275 cents per pound after reaching 103.875 cents, the contract's highest since 5 March. October live cattle rose 2.050 cents at 106.600 cents.

CME August feeder cattle futures settled up 3.175 cents at 142.600 cents per pound.

Cash cattle traded as high as $97 per cwt in Kansas this week, compared to $95 last week.

"Packers are not going to do anything out of the goodness of their heart. If they put better money on the table, it means they've got enough orders where they need the cattle," said Dan Norcini, an independent livestock trader.

CME cattle futures tumbled in March and April as the coronavirus sickened workers at slaughterhouses, forcing several to close temporarily. Those shutdowns created a backlog of cattle in feedlots.

As the daily US cattle slaughter recovered in May and June, beef supplies increased and wholesale prices fell, although values seemed to stabilise this week. Prices for choice cuts of boxed beef on Thursday afternoon rose $0.04 to $200.80 per cwt while select cuts fell $0.07 to $191.30 per cwt, according to the USDA.

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