US feeder cattle, deferred live cattle hit new highs - CME

October lean hog futures settle up
calendar icon 12 September 2023
clock icon 2 minute read

US feeder cattle futures and deferred live cattle futures hit new contract highs on Monday, as tight US supplies going into next year continued to fuel the bull market, Reuters reported, citing traders.

Even Chicago Mercantile Exchange's (CME) October and December live cattle futures surged within $1 of their contract highs, fuelled by optimism in the cash market and investors betting that the supply problems will stretch on.

"The managed money crowd has been long for a while, and they're getting longer" particularly on the feeder side, said Ross Baldwin, a cattle analyst at John Stewart & Associates.

Though beef exports have been sluggish, domestic demand has remained steady, which is helping support prices, said Karl Setzer, brokerage research lead for Mid-Co Commodities.

Traders are expected to closely watch for production and demand updates for the pork and beef markets in the monthly US Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates, set to be released on Tuesday.

While cattle inventories in the US have dwindled to their lowest levels in decades amid ongoing drought woes, analysts said that investors are already anticipating supply concerns in the beef sector well into next year.

Boxed beef prices ended lower on Monday, with choice cuts falling $2.79 to $310.11 per hundredweight (cwt), while select cuts dropped 61 cents to $285.44 per cwt, the USDA said.

All CME feeder cattle futures hit new contract highs on Monday. October feeder cattle futures settled up 2.300 cents at 261.450 cents per pound, and reached a high of 261.650 cents during the session.

Nearby October live cattle ended up 1 cent at 184.225 cents per pound. During the session, the contract hit $184.800 - the highest price since July 20.

CME October lean hog futures settled up 1.025 cents at 82.550 cents per pound.

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