Cattle futures rise on firm cash market, harsh Plains weather
Source : Karl Plume
CHICAGO, Jan 10 (Reuters) – U.S. live cattle futures climbed to the loftiest levels of the week on Friday on expectations for higher cash cattle sales at Plains feedlot markets and as harsh weather in parts of the region increased stress on the animals.
Some feedlot cattle in the central and northern Plains have traded at prices steady to firmer than a week ago, while cattle in the southern Plains were expected to trade later on Friday at least $1 per cwt higher than last week’s sales of mostly $124 per cwt, traders said.
Seasonally tight inventories of cattle have elevated the market in recent weeks despite thinning beef packer margins. Facing strong beef demand and tightening supplies of cattle, beef packers have been buying cattle more aggressively so as not to run short.
The wholesale choice boxed beef cutout value rose 8 cents to $210.04 per cwt on Friday, up $1.55 from a week ago, according to the U.S. Department of Agriculture. Select cuts were $206.55 per cwt, down 13 cents on the day but up $1.16 from a week ago.
Average beef packer margins widened slightly to $7.40 per head on Friday, up from $3.15 per head a day earlier, according to livestock marketing advisory service HedgersEdge.com LLC.
But margins have fallen sharply from recent highs. They were at $145.45 per head a month ago and more than $360 per head two months ago, according to HedgersEdge data showed.
Meanwhile, plunging temperatures, snow and ice are stoking concerns about slowed weight gains in cattle, traders said.
Chicago Mercantile Exchange February live cattle rose 0.700 cent to 127.425 cents per pound, the contract’s highest close since Dec. 13. April cattle were up 0.650 at 127.950 cents.
Feeder cattle followed live cattle higher, with actively traded March futures up 0.900 cent at 147.450 cents per pound.
The deal is expected to accelerate Chinese buying of U.S. pork as part of what the White House says is a vow by Beijing to roughly double U.S. farm goods purchases from levels seen before the trade war broke out in 2018.
CME February hogs rose 0.225 cent to 67.250 cents per pound while April futures fell 0.350 to 74.125 cents.