April 30, 2021
US live cattle futures up on grain market uncertainty, lean hog futures eased
Live cattle futures on the Chicago Mercantile Exchange (CME) were up as traders said the mixed grain trade offered some relief for feed costs and high demand for beef supported prices, Reuters reported.
June live cattle futures on the CME was 0.600 cent up to 116.050 cents per pound. Feeder cattle futures for August were also up 0.975 cents to end at 149.875 cents per pound.
Demand for beef remained high, as US Department of Agriculture (USDA) data showed beef cutouts increased US$1.26 per cwt. to US$293.76, and select cuts US$0.79 up to $279.79.
There is high export demand as well, with the USDA reporting 23,000 tonnes in net sales, only 4% lower than the previous week but 22% up compared to the prior 4-week average.
Altin Kalo, economist at Steiner Consulting Group, said while consumer demand for beef remains high, the increased meat prices aren't not translating to better cash cattle trade.
He said consumer beef demand will not affect feedlots with over-finished cattle especially if the meatpackers have already covered their cattle needs for the week. The feedlots will be forced to lower asking prices to get cattle scheduled.
Kalo said cattle slaughter needs to remain at a high pace to lower producer supplies.
US lean hog futures eased as the cash market softened after increased for about three months.
The CME's lean hog index ended US$107.01 per cwt., its first step lower since February 3 this year. The lean hog index is a two-day weighted average of cash prices
The most-active June lean hogs contract on the CME was down 2.400 cents to 106.725 cents per pound.
USDA data showed the 35,600 tonnes of pork exports sales were down from the previous week, but 59% higher compared to the prior 4-week average.