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LIVESTOCK: Beef price surge extends CME live cattle advances

CME feeder cattle up with live cattle, hog futures end mixed on cash price unease

Chicago Mercantile Exchange live cattle futures gained for a third straight session, fuelled by sharply higher wholesale beef prices, traders said.

August live cattle finished 1.325 cents per lb higher at 152.950 cents, and October 0.925 cent higher at 155.250.

Monday morning’s wholesale price for choice beef jumped $2.02 per cwt from Friday to $250.47. Select beef climbed $1.69 to $244.34, according to the U.S. Department of Agriculture.

“Unbelievable that demand stays strong,” said Oak Investment Group president Joe Ocrant. He pointed to continued tight cattle supplies at a time when numbers tend to build seasonally.

Cooler-than-usual weather is extending beef demand that usually tapers off as consumers turn to lighter meals during hot summer temperatures.

And, fewer cattle forced packers to cut back slaughter rates, making the product less available to retailers.

CME live cattle received more support from short-covering and futures’ discount to last week’s prices for market-ready or cash cattle.

Investors wait for feedlots to count the number of cattle available for clues regarding this week’s cash prices.

Last week, cash cattle in the southern Plains moved at mostly $155 per hundredweight (cwt), with sales of $156 to $157 in Nebraska.

USDA’s monthly cold storage report will be issued on Tuesday at 2 p.m. CDT (1900 GMT), which will include total June beef and pork inventories.

CME feeder cattle closed higher supported by live cattle futures gains, fund buying and lower corn prices.

August closed up 1.375 cents per lb to 213.025 cents, and September ended 1.475 cents higher at 213.775.

Mixed hog futures settlement

CME hog August and October contracts closed lower in anticipation of weaker cash prices after packers bought all the hogs they need for early this week.

The government’s morning direct hog price data was unavailable. Cash hogs earlier on Monday traded steady to down $1 per cwt from Friday, Midwest hog dealers said.

Traders sold nearby CME hogs, and at the same time bought deferred months, with the view that the deadly pig virus on U.S. hog farms will further constrict supplies beginning in late fall.

August ended 1.975 cents per lb lower at 125.100 cents, and October at 112.700, down 0.850 cent. December closed up 0.300 cent to 103.900, and February up 0.175 to 99.450.


Theopolis Waters writes for Reuters news service in Chicago

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