Live cattle futures firm on strong packer demand - CME
Lean hogs pressured by uncertain demand
Chicago Mercantile Exchange (CME) Group live cattle futures firmed on Monday, supported by strong packer demand that supported cash prices, indicating a bullish outlook for summer month futures, reported Reuters, citing analysts.
"Packer behaviour has been bullish for several weeks now. They are going after the cattle," said Dennis Smith, commodity broker at Archer Financial. "I suspect it's a combination of better-than-expected demand and lower-than-expected supply."
Cash cattle traded steady despite a premium to the futures market, bringing $146 per cwt. in the Northern US Plains, while in the Southern plains, cash traded at $140 per cwt. according to the US Department of Agriculture (USDA).
CME June live cattle futures settled .800 cent higher at 133.550 cents per pound, while August feeder cattle eased 0.475 cent to 174.225 cents per pound.
Recent rainfall across the Great Plains has greened pastureland, giving producers an incentive to graze cattle rather than sending to feedlots at a time when feed grains like corn and wheat are soaring.
"We're getting rainfall in the dry drought areas, from Texas to Montana," said Smith. "They can now run these cattle on grass."
Wholesale boxed beef prices were mixed, with choice cuts adding $4.57 to $259.01 per cwt, while select cuts eased 81 cents to $244.25 per cwt, according to the USDA.
Meanwhile, lean hogs remain pressured by uncertain export demand, as China extends COVID-19 lockdowns and the nation's attempt to rebuild its domestic hog herd after African swine fever decimated supplies in recent years.
Benchmark June lean hogs fell 2.800 cents to 101.300 cents per pound. July hogs lost 2.850 cents to 104.200 cents per pound.
Hog processors slaughtered 468,000 head on Monday, down from 482,000 a week earlier and 477,000 in the same period a year ago.
CME's Lean Hog Index, a two-day weighted average of live hog prices, fell 5 cents to $100.91 per cwt.
Source: Reuters