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CME update: cattle futures climb as demand strengthens

30 September 2020

US live cattle futures rose on 29 September as traders noted signs of strong beef demand and expectations of firm cash cattle trading this week.

Reuters reports that US live cattle futures gained ground on Tuesday, with the December contract reaching its highest in a month. Commodity funds also appear to be adjusting positions in anticipation of the end of the month and quarter.

"It's the second-to-last day of the month. I think a lot of funds are dressing up their long positions," said Jeff French, analyst with Top Third Ag Marketing.

Chicago Mercantile Exchange October live cattle settled up 0.950 cent at 108.900 cents per pound and most-active December ended up 1.475 cents at 113.125 cents after reaching 113.550, its highest since 20 August.

CME November feeder cattle finished 2.675 cents higher at 143.775 cents per pound.

Packer margins narrowed since Monday 28 September but were still robust at around $300 per head, a factor that helped fuel expectations that meat packers might pay feedlots more for market-ready cattle than they did last week.

"There was kind of a consensus that demand for beef is really good, surprisingly good, and that may embolden the feedlots to wait for better money," said Dan Norcini, an independent livestock trader.

Seasonally, demand for beef tends to pick up in October after a lull in September, French noted.

Wholesale boxed beef prices were mixed on 29 September, with choice cuts dropping 56 cents to $217.16 per cwt, while select cuts rose 57 cents to 206.99 per cwt, the US Department of Agriculture said.

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Source: Reuters


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