U.S. livestock: CME live cattle inch higher in technical bounce

Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange closed modestly higher on Thursday on rising wholesale beef prices and a technical bounce after the benchmark August contract dipped to a two-week low.

The cattle market has been consolidating after a surge to contract highs on June 7 triggered several days of profit-taking and fund-driven long liquidation. But tightening U.S. cattle supplies and strong beef demand continue to offer fundamental support.

CME August live cattle futures settled Thursday up 0.1 cent at 171.075 cents/lb., rallying after a fall in early moves to 169.65 cents, its lowest since June 1 (all figures US$).

CME feeder cattle futures declined, pressured by a surge in corn futures that signaled higher feed grain costs. August feeders ended down 1.775 cents at 234.125 cents/lb.

Beef prices continued to climb. The U.S. Department of Agriculture priced choice cuts on Thursday at $342.07 per hundredweight (cwt), up $3.01 from Wednesday and the highest since August 2021.

Hog futures closed mixed. CME July hogs ended down 0.85 cent at 91.925 cents/lb., turning lower after a rise to 94.3 cents, close to its 100-day moving average and the contract’s highest since April 4, while August hogs ended up 0.625 cent at 90.3 cents/lb.

Rising pork prices underpinned futures. USDA priced the carcass cutout at $90.89/cwt on Thursday afternoon, up $1.16 from Wednesday and the highest since late December.

This week’s hog slaughter continues to lag the year-ago pace, limiting pork supplies. USDA reported the week-to-date hog slaughter at 1.853 million head, down from 1.868 million a year ago.

Separately, the USDA reported export sales of U.S. pork in the week to June 8 at 26,700 metric tonnes, up five per cent from the previous week but down two per cent from the prior four-week average. Weekly beef sales totaled 12,800 tons, steady with the previous week but down 23 per cent percent from the prior four-week average.

In the global marketplace, Taiwan agreed to fully open its market to imports of Canadian beef, lifting a stumbling block as Taipei angles to sign a bilateral investment agreement with Ottawa this year. And China lifted its ban on imports of beef from cattle less than 30 months old from Poland and Belgium.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.