Chicago | Reuters — U.S. cattle futures climbed about one per cent on Monday, with several deferred live cattle contracts notching lifetime highs and front-month feeders hitting a 15-month peak on investment fund buying tied to gains in beef prices.
Some cattle futures contracts reversed from earlier small losses at midday, boosted by U.S. Department of Agriculture data showing higher prices for choice-grade wholesale beef. Beef prices typically decline in June following stepped-up buying from retailers for outdoor grilling during the U.S. Memorial Day holiday weekend at the end of last month.
But high prices for live cattle in recent months enticed feedlots to sell cattle at lower weights, resulting in relatively tighter supplies now.
“I’ve seen an awful lot of beef movement. Packers need choice (beef),” said Zaner Group broker Tim Hackbarth.
Chicago Mercantile Exchange June live cattle settled 1.275 cents higher at 132.1 cents/lb. while most-active August gained 0.15 cent to 126.2 cents (all figures US$). The October, December and February contracts hit life-of-contract highs.
CME August feeder cattle finished 1.15 cents higher at 159.875 cents/lb., highest on a continuous chart since March 24, 2016.
USDA said feeder steers sold as much as $14/cwt higher at a closely watched cattle auction in Oklahoma City. “Demand good to very good, with feedlots wanting to keep their pens full before auction offerings diminish,” USDA said.
Some traders were buying back short positions as the CME Group’s feeder cattle index continued to gain. “The trend is up, and the trend is your friend.” said A+A Trading Inc. broker Jim Clarkson.
CME lean hog futures were lower, with deferred contracts falling sharply on technical selling and expectations for more abundant hog supplies later this year. Investors also were taking profits on long bets after prices last week reached multimonth highs.
June lean hog futures were down 0.5 cent to 80.725 cents/lb. and most-active July hogs were down 1.55, to 80.425 cents, a drop of 1.9 per cent. December hogs tumbled 2.5 per cent.
USDA after the close of futures trading said negotiated hogs sold $1.34 higher to $74.26 per cwt in the Iowa and southern Minnesota cash market while wholesale pork prices were slightly lower.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago. Additional reporting for Reuters by Theopolis Waters in Chicago.Tagged beef prices, cattle futures, closing markets, CME, feeder cattle, hog futures, lean hogs, live cattle