Cattle futures end higher as beef prices climb - CME

Hog futures end mixed
calendar icon 8 March 2024
clock icon 2 minute read

Chicago Mercantile Exchange (CME) live cattle futures ended higher on Thursday as firming wholesale beef prices fuelled optimism that cash cattle prices would rise, Reuters reported, citing traders.

CME benchmark April live cattle settled up 1.475 cents at 188.725 cents per pound, while April feeder cattle futures rose 0.425 cent to finish at 256.300 cents per pound. A 2% jump in Chicago Board of Trade corn futures capped gains in feeder cattle, signalling higher feed costs.

Meat-packers have been struggling with negative profit margins for processing cattle, but an upturn in wholesale beef prices since mid-February has helped stem the losses.

The US Department of Agriculture (USDA) reported the choice boxed beef cutout on Thursday afternoon at $306.61 per hundredweight (cwt), up $1.70 from Wednesday and the highest reading since Oct. 30.

"The boxed beef market has been relatively strong lately," said Austin Schroeder, analyst for Brugler Marketing & Management in Nebraska. "If you do get strength, it's relief for packers," he said.

In the cash market, packers have been bidding at $182 to $183 per cwt this week for market-ready cattle while feedlot offers were $186 to $187, traders said. Cash trade has been quiet in the southern Plains so far this week but could begin on Friday. Cash cattle traded last week at around $183 per cwt.

However, weak margins have prompted meat-packers to slow the slaughter pace, a factor that could limit the volume of cash trade.

"I don't know how hey aggressive they are going to be in trying to buy cattle, simply because I don't think we are going to see much of a weekend kill," said Sterling Smith, director of agricultural research at AgriSompo North America.

CME lean hog futures closed mixed. The most-active April contract settled down 0.475 cent at 84.525 cents per pound while June hogs ended up 0.650 cent at 101.150 cents per pound.

The USDA priced the carcass cutout late Thursday at $91.15 per cwt, down 34 cents from Wednesday.

In its weekly export sales report, the USDA reported US pork sales in the week to Feb. 29 at 36,400 tons and beef sales at 14,000 tons.

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