U.S. livestock: Live cattle end mixed

Back months hit contract highs

october live cattle
CME October 2018 live cattle, with 20-day moving average in blue. (Barchart.com)

Chicago | Reuters — U.S. live cattle futures ended mixed on Thursday as nearby contracts were anchored by their premium to cash market prices while deferred months firmed to contract highs on a strong demand outlook, traders said.

Feeder cattle futures followed deferred live cattle contracts higher, along with continued support from a slumping corn market as the feed grain fell to contract lows on Thursday.

Traders are monitoring the latest developments on possible trade negotiations between Washington and Beijing as Chinese officials welcomed an invitation for a new round of talks with more U.S. tariffs looming.

“With the strong economy, domestic (beef) demand just continues to be strong along with strong exports,” said Don Roose, president of U.S. Commodities.

“You had contract highs in the deferreds. There is optimism that we’re going to get some kind of a resolution with China eventually, and maybe beef’s included in that,” he said.

Chicago Mercantile Exchange October live cattle fell 0.675 cent/lb. to 110.8 cents and December ended down 0.125 cent at 115.4 cents (all figures US$). February 2019 to February 2020 contracts all posted life-of-contract highs during the session.

CME October feeder cattle ended 0.375 cent/lb. higher at 155.4 cents.

The U.S. Department of Agriculture on Thursday reported the latest week’s net beef export sales at 10,825 tonnes. The weekly volume was the smallest in seven weeks but year-to-date sales and shipments are up 19 per cent from the same time last year, USDA data showed.

Cattle traders are still waiting for cash deals to develop this week, with bids and offers at U.S. Plains feedlot cattle markets remaining far apart on Thursday. Sales last week were mostly $108/cwt.

Lean hog futures closed mixed on Thursday, with nearby contracts down on a wide premium to cash prices and profit taking from a strong rally on Wednesday.

Deferred-month futures remain underpinned by speculation that a widening outbreak of African swine fever in China could tighten supplies in the world’s top hog and pork producing country and possibly elevate U.S. exports.

CME October lean hogs ended down 0.125 cent/lb. at 55.675 cents, while December gained 0.3 cent, to 55.925 cents.

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

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