Chicago | Reuters — Chicago Mercantile Exchange live cattle futures continued to rally Thursday, holding to a nearly six-month peak in prices, as exports to China also grew, traders said.
China was a big buyer of U.S. beef in the latest week, with sales of 1,927 tonnes for the period through Aug. 6, the most since 2002, according to the U.S. Department of Agriculture.
But a weekly U.S. government report showed that pork export sales to China were a net negative 8,978 tonnes after cancellations. That was the smallest weekly total since mid-May.
Beef slaughter rates continue to increase, traders said, and meatpackers are paying more for cattle due to the strength of the beef market. Demand and prices normally are higher heading into Labour Day, a major holiday for consumers to barbecue at home.
Prices for choice cuts of boxed beef rose $1.83, to $210.92/cwt, while select cuts increased by $1.51, to $197.50/cwt, according to the U.S. Department of Agriculture (all figures US$).
CME October live cattle rose 0.575 cent to settle at 110.15 cents/lb., the highest price since March 4. September feeder cattle slipped 0.3 cent, to 144.95 cents/lb.
Profit margins for beef processors continued to increase on Thursday, to $249.55 per head of cattle from $246.65 a day earlier, according to Denver-based livestock marketing advisory service HedgersEdge.com.
Traders said they would be closely watching for increased interest in U.S. meat exports in the coming days, after China on Thursday identified a Brazilian processor of chicken and pork as the source of chicken wings that tested positive for the novel coronavirus.
In the pork market, CME October lean hogs settled 0.75 cent higher at 52.35 cents/lb.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Tom Polansek in Chicago.