Livestock-CME Live Cattle Climb on Strong Cash Market
Chicago Mercantile Exchange (CME) live cattle futures experienced a rally on Friday, driven by tight fed cattle supplies and higher sales in the cash market in the central US Plains and western Midwest. Beef packers were in need of cattle to meet near-term operations, including a large Saturday slaughter and a full week of production after the Independence Day holiday. The drop in feed corn costs also supported feeder cattle futures, which further bolstered live cattle. However, the decline in boxed beef prices may impact the strength of the live cattle market, as the cooler demand period commences after July 4.
According to the US Department of Agriculture, Saturday’s cattle slaughter was estimated at 78,000 head, a significant increase from the previous week but still lower than the figure recorded a year ago. Cash cattle traded as high as $184 to $185 in northern feedlot areas, highlighting the upward trend in sales compared to the previous week. However, boxed beef prices saw a decline, with choice cuts falling $2.97 to $316.90 per cwt and select cuts declining $4.34 to $285.63 per cwt.
In terms of specific futures contracts, August live cattle ended 2.425 cents higher at 177.000 cents per pound, while August feeders were 3.150 cents higher at 245.425 cents per pound. Meanwhile, CME lean hog futures predominantly declined due to technical selling pullback from recent highs.
The agricultural markets remain dynamic and subject to various factors that influence price movements and market trends. As the industry continues to navigate challenges, market participants must carefully analyze the current conditions and consider potential opportunities. The supply and demand dynamics, along with feed costs and consumer preferences, will continue to shape the livestock market in the coming weeks.
While the live cattle market has been supported by tight supplies and increased cash market sales, the decline in boxed beef prices warrants close attention. Market participants should monitor consumer demand and the overall trend in boxed beef prices, as they can have a significant impact on the profitability of the industry. Additionally, keeping an eye on feed costs, such as feed corn prices, is crucial for livestock producers and traders, as it can influence the profitability of raising and feeding cattle.
Overall, the livestock market is experiencing positive momentum, driven by tight supplies and increased cash market sales. However, market participants should remain cautious and closely monitor key factors such as boxed beef prices and feed costs to navigate potential challenges and capitalize on opportunities in the dynamic agricultural markets.
