Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rallied on Friday on tight fed cattle supplies and higher cash market sales in the central U.S. Plains and western Midwest, traders said.
Beef packers were in need of cattle to fill near-term operations, including a large Saturday slaughter and a full week of production next week after this week’s Independence Day holiday-abbreviated operations.
A drop in feed corn costs boosted feeder cattle futures, which further supported live cattle, traders said.
“The cash market was strong heading into the weekend with the big Saturday run. And with corn fading back to the lower end of the (recent trading) range, it put buying back in the feeders,” said Matthew Wiegand, broker with FuturesOne.
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“Boxed beef did take another step back. If that trend accelerates to the downside, it may start to blunt some of the live cattle strength because, now that we’re out past July 4, we are in a cooler demand period,” he added.
The U.S. Department of Agriculture estimated Saturday’s cattle slaughter at 78,000 head, up from 22,000 head last week but down from 86,000 head a year ago.
Cash cattle traded late this week as high as $184-$185 in northern feedlot areas, up from sales of around $178-$182 last week, traders said (all figures US$).
Boxed beef prices, however, were lower on Friday. Choice cuts fell $2.97, to $316.90/cwt, down $10.82 in the week. Select cuts declined $4.34, to $285.63/cwt, down $8 this week.
August live cattle ended 2.425 cents higher at 177 cents/lb., while August feeders were 3.15 cents higher at 245.425 cents/lb.
CME lean hog futures ended mostly lower in a technical selling pullback from recent highs.
August futures were down 1.975 cents at 95.15 cents/lb. after touching a near-four-month peak on Thursday.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
