U.S. livestock: Cattle futures up ahead of USDA feedlot data
Hog futures mixed; U.S. pork export sales up on week
| 2 min read
CME August 2023 feeder cattle with 20-day moving average (red line, right column) and CBOT July 2023 corn (yellow line, left column). (Barchart)
Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rose on Thursday on technical buying and position-squaring ahead of a monthly U.S. Department of Agriculture (USDA) report that is expected to show fewer cattle in U.S. feedlots compared to a year ago, traders said.
CME June live cattle settled up 0.7 cent at 165.525 cents/lb., and benchmark August futures ended up 0.5 cent at 163.625 cents.
CME August feeder cattle jumped 3.35 cents to finish at 234.5 cents/lb. after setting a life-of-contract high at 234.55 cents. Feeder cattle futures rose as corn futures fell to a 19-month low, signaling cheaper feed costs.
Ahead of Friday’s monthly USDA Cattle on Feed report, analysts surveyed by Reuters on average expected the government to report the number of cattle in U.S. feedlots as of May 1 at 96.5 per cent of a year ago, or about 11.6 million head. Analysts on average estimated feedlot placements in April at 96.3 per cent of a year ago and April cattle marketings at 90.3 per cent of a year ago.
“Overall, the supply side looks very positive. The USDA last Friday estimated that U.S. beef production was going to fall (in 2024), after falling this year. So there doesn’t seem to be supply-side relief any time soon,” said Doug Houghton, analyst for Brock Associates
The U.S. beef cow herd dropped to its lowest level since 1962, USDA said in January, after a severe drought raised costs for livestock feed.
Boxed beef prices inched higher on Thursday, with choice cuts priced at $298.31 per hundredweight (cwt), up 16 cents from Wednesday, and select cuts up 72 cents at $283.61/cwt.
CME lean hog futures closed mixed, with nearby contracts higher and back months lower. June hogs settled up 0.425 cent at 85.3 cents/lb. and the July contract rose 0.05 cent to end at 85.6 cents.
On the pork side, USDA priced the carcass cutout late Thursday at $83.73/cwt, up 66 cents from Wednesday.
USDA reported export sales of U.S. pork in the week to May 11 at 31,900 tonnes, up six per cent from the previous week but down 25 per cent from the prior four-week average. Weekly beef sales at 17,400 tonnes were up five per cent from the previous week and up seven per cent from the prior four-week average.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
