Chicago | Reuters — Most of the Chicago Mercantile Exchange feeder and live cattle futures hit new contract highs again on Tuesday, as tight U.S. supplies and forecast of a strong cash market added fuel to a bull rally, traders said.
But by the end of the session, both live and feeder cattle futures were mixed on profit-taking and technical trading, analysts said.
The hog market mostly turned up, following cattle, with CME October lean hog futures settled the day up 2.722 cents, at 85.275 cents/lb. (all figures US$).
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It was a volatile day of trading, traders said, as a sharp drop in U.S. corn futures bolstered both cattle futures and cash markets, analysts said.
Chicago Board of Trade corn futures dropped sharply on Tuesday after the U.S. Department of Agriculture’s monthly world agricultural supply and demand estimates (WASDE) report said crops were not hampered as much as traders expected by hot and dry weather this summer.
The low corn prices may convince farmers to keep more of their animals on feed, which could push buyers to pay, said Don Roose, president of Iowa-based broker U.S. Commodities.
The WASDE report also boosted cattle futures, when it kept its forecast for cash cattle prices this year and next unchanged, analysts said.
For fourth-quarter of 2023, USDA forecast cash cattle price at $190 per hundredweight (cwt). They’re currently trading at $186/cwt in the corn belt and $182/cwt in the Plains, Roose said.
Boxed beef prices fell for a second day — with choice cuts down by $2.08, to $308.03/cwt, and select cuts down $1.66, to $283.78/cwt, USDA said separately.
CME October feeder cattle futures settled down 0.2 cent at 261.25 cents/lb. It reached a new contract high of 262.075 cents during the session.
Nearby October live cattle settled down 0.075 cent, at 184.15 cents/lb.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.
