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CME update: cattle futures firm as cold storage supplies decline

24 June 2020

US live cattle futures rose on 23 June after two sessions of declines.

Reuters reports that USDA data shows a larger-than-expected decline in cold storage stocks of beef, firming prices.

The USDA stocks report, released after the markets closed on 22 June, showed a steep drop in frozen beef supplies for the month of May.

Frozen inventories plummeted last month due to outbreaks of COVID-19 among meat plant workers. This slowed production and made exporters draw from supplies in storage.

CME August live cattle rose 2.075 cents to 97.200 cents per pound and August feeder cattle jumped 1.450 cents to $133.200 cents per pound.

"This is certainly a cold storage report reaction. Pork numbers were a record for any previous month and the beef numbers were the second largest decline of any previous month," said Rich Nelson, chief strategist with Allendale Inc.

Ample supplies of livestock following coronavirus-related supply-chain disruptions continue to hang over the market.

Markets are also wary about requests by Chinese authorities to certify food import shipments to be free of coronavirus contamination. Although there is no evidence that the virus can be transmitted from food to people, at least three Brazilian meat processors have signed such declarations.

Read more about this story here.



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