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U.S. livestock: CME live cattle end mixed as market weighs big supply

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures were mixed on Tuesday as the spot contract rose on its discount to the cash market while deferred months drifted lower under heavy supplies of cattle, traders said.

CME April live cattle closed up 0.775 cent/lb. at 112.8 cents, edging up ahead of the contract’s end-of-month expiration when it aims to converge with a cash market that last week traded in the 116- to 118-cent/lb. range (all figures US$).

June cattle fell 0.4 cent, to 102.1 cents.

“The April has to respect the cash market more than the back (months) do,” said Alan Brugler, president of Brugler Marketing and Management.

“We know overall that ready numbers are rising, the finished numbers coming out of the feedlots have been going up from now into June,” he said.

Packers will be buying cattle from larger showlists at U.S. Plains feedlots this week, with some early-week bids reported to be around $116/cwt, said Rich Nelson, chief strategist with Allendale Inc.

Wholesale beef prices fell on Tuesday, with choice cuts down $1.53/cwt and select cuts off $1.81.

The U.S. Department of Agriculture lowered its second-quarter U.S. beef production estimate in a monthly report on Tuesday due to a lower slaughter and lighter cattle weights, but raised its third-quarter slaughter forecast. The agency also cut its cattle price forecast due to plentiful supplies.

Feeder cattle futures were also mixed, with April settling up 0.375 cent/lb. at 134.825 cents and May down 0.25, to 135.275 cents.

Lean hog futures ended higher in nearby contracts and lower in deferred months as hefty supplies of animals weighed prices. The market, however, was probing for a bottom following a recent steep decline to 16-month lows.

USDA raised its first-quarter pork production estimate for the U.S. but reduced its outlook for the remainder of the year due to a slower slaughter pace. It also cut pork exports due to an expected drop in demand from China, which has threatened to impose import duties on U.S. pork amid an ongoing trade dispute.

April hogs settled up 0.6 cent per pound at 53.5 cents. May futures were 0.125 cents higher at 67.45 cents and June finished 0.825 cents lower at 75.05 cents.

— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.

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