October lean hog futures end weaker - CME

Cattle markets set highs on tight US supply
calendar icon 11 September 2023
clock icon 2 minute read

US feeder cattle futures and deferred live cattle futures climbed to new peaks on Friday, as limited US supplies continued to propel prices, reported Reuters.

Inventories of US cattle dwindled to their lowest levels in decades after producers reduced their herds over the last year because drought reduced the availability of pastures for grazing.

"It's a bull market," said Scott Varilek, broker at Kooima Kooima Varilek Trading. "We have tight, tight supplies."

October feeder cattle futures finished up 0.275 cent at 259.150 cents per pound at the Chicago Mercantile Exchange (CME) and reached a contract high of 259.650 cents.

Live cattle set highs in the June 2024 and August 2024 contracts. Nearby October live cattle ended down 0.425 cent at 183.225 cents per pound, a day after touching their highest price since July 20.

Gains this week signal expectations for higher cash cattle prices, brokers said. They added that producers are willing to delay sales to processors to wait for higher prices.

Meatpackers are earning money processing cattle, which helps to support demand, brokers said. On Friday, their estimated margins were $59 per head of cattle, down from $72.45 on Thursday and $59.35 a week ago, HedgersEdge.com said.

Packers slaughtered an estimated 125,000 cattle, compared to 122,000 cattle a week ago and 128,000 cattle a year ago, the US Department of Agriculture (USDA) said. Boxed beef prices rose for choice cuts by $1.24 to $312.90 per cwt, the USDA said separately.

High beef prices reduced US export demand after cattle supplies tightened. Weekly US beef export sales for 2023 were 11,900 metric tons, down 34% from the previous week and 20% from the prior four-week average, the USDA said.

For pork, weekly US export sales were 26,300 metric tons for 2023, down 29% from the previous week and 13% from the prior four-week average.

CME October lean hog futures ended 1.300 cents weaker at 81.525 cents per pound after touching their lowest price since Aug. 30 at 80.950 cents.

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