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CME update: live cattle futures climb as cash markets and beef demand become more optimistic

26 November 2020

US live cattle futures rose on 25 November for a fourth straight session, climbing ahead of the US Thanksgiving holiday on 26 November.

Reuters reports that the climb comes amid strong packer margins fed expectations of improving cash cattle prices over the next few weeks.

Chicago Mercantile Exchange February live cattle futures settled up 0.225 cent at 114.175 cents per pound.

CME January feeder cattle ended up 1.575 cents at 140.175 cents per pound.

 

Meat packers were earning margins estimated at $448 per head of cattle on Wednesday 26 November, up from $371 a week ago, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.

The margins reflect a rally in wholesale (boxed) beef prices that began in late October.

"The boxed beef has been on fire. The feeling is that (consumers) are stockpiling again ... and also there is an upbeat attitude on these (COVID-19) vaccines, giving people hope for the future," said Don Roose, president of Iowa-based US Commodities.

Choice boxed-beef cuts were up $0.76 on Wednesday afternoon at $245.06 per cwt, the highest since June. Select cuts were up $1.19 at $220.90, the US Department of Agriculture said.

With beef demand lifting margins, packers paid $110 to $111 per cwt for market-ready cattle in the southern Plains cash market on Wednesday, the USDA said, steady to $1 higher with last week's trades.

Trade in CME livestock futures will be closed on Thursday, with markets resuming for a shortened session on Friday 27 November.

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Source: Reuters



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