USDA lifts estimates for beef production, cattle prices
The amendment is due to strong demand and heavier livestockThe U.S. Department of Agriculture on Tuesday raised its forecast for beef production and cattle prices in 2021 and 2022 due to strong demand and heavier livestock, Reuters reports.
Robust sales of U.S. beef to domestic consumers and overseas buyers have helped support Chicago Mercantile Exchange (CME) cattle futures.
In a monthly report, the USDA raised its 2021 beef production forecast by 0.2% from October to 27.885 billion pounds. The reason for the raise is larger expectations for slaughtering of fed cattle and heavier carcass weights.
The agency also raised its average price estimate for cattle by 0.2% to $121.31 per cwt.
CME December live cattle futures ended up 0.100 cent at 132.200 cents per pound on Tuesday, after rising on Monday to their highest since Sept. 3 at 132.500 cents.
The most actively traded January feeder cattle contract slipped 0.600 cent to settle at 159.800 cents per pound. The contract matched its Monday high of 160.600, which was the highest price since Oct. 27.
Traders said they are waiting to see whether cash prices for fed cattle strengthen this week as they did toward the end of last week in a sign of demand from meatpackers.
Profit margins for beef processors eased to $561 per head of cattle from $579.05 per head on Monday and $569.55 a week ago, marketing advisor HedgersEdge.com said.
Boxed beef prices slipped by 0.85 cent for choice cuts to $287.80 and rose by $2.02 to $270.62 per cwt for select cuts, the USDA said in a daily report.
"The boxed beef rally has kind of cooled off," said Matt Wiegand, a commodity broker for FuturesOne.