Glacier FarmMedia COVID-19 & the Farm

U.S. livestock: Cattle rise on cash gains

Live cattle cap best week since February

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — U.S. live cattle futures jumped about one per cent on Friday, capping their best weekly performance since February as investors added to long bets following higher trades in Great Plains cash cattle markets, traders and analysts said.

Chicago Mercantile Exchange feeder cattle were also higher, although each cattle contract finished just below their respective multiweek highs touched on Thursday. The higher futures on Friday followed cash cattle deals after the close of Thursday’s trading at $118/cwt, trades that were up $2 from last week.

Better-than-expected U.S. jobs data, coupled with record-high closes in the S&P 500 and Nasdaq indexes, further supported cattle futures even as wholesale beef prices edged lower on Friday.

“The higher stock market is always helpful to cattle,” said independent livestock trader Dan Norcini. “Traders like to buy cattle when they think the economy is perking up and consumers are willing to spend. That’s because beef is the priciest of proteins.”

Cattle futures have rallied from multiyear lows reached on July 20, with a growing U.S. herd and stiff competition at the retail level from cheaper and plentiful pork and poultry supplies weighing on cattle prices before the recent rebound.

CME October cattle settled 0.75 cents higher at 115.525 cents/lb. while cattle on a continuous chart gained four per cent for their second straight weekly gain.

CME September feeder cattle were 1.975 cents higher at 147.2 cents/lb. Front-month feeders surged 6.9 per cent for their largest weekly gains since December.

U.S. Commodity Futures Trading Commission data released after the close of trading showed speculative investors as of Tuesday extended their net long in live cattle and nearly flipping from to a net long in feeders.

“I wonder if the speculative crowd is more interested in bottom-picking from a technical perspective,” said Zaner Group analyst Ted Seifried, adding that prices could extend their rebound further in the coming days.

Lean hog futures were narrowly mixed, with nearby contracts recouping a portion of their recent losses. The hogs market overall remained pressured by record-large U.S. hog and pork production as supply has outpaced demand.

Most-active CME October hog futures edged 0.2 cent lower to 58.3 cents/lb., capping the contract’s fifth consecutive weekly loss.

— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.

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