US cattle futures gain on cash sales and higher market

 

 

US cattle futures advanced early on Thursday (June 24) to a near three-week high in reaction to steady cash cattle prices this week and a higher beef market.

 

The June contract reached 90.750 cents per lb at the CME, the second best top in three weeks. The August advanced after early selling failed to push it below a key chart support area.

 

Meanwhile, hog futures were mixed on Thursday with lower cash prices in the key Iowa market putting pressure on the lead July contract.

 

Cash cattle traded at US$91 per cwt on Tuesday and Wednesday in the Kansas and Texas markets. The US$91 was unchanged from a week ago, which seemed to cheer investors who had watched cash prices drift lower in previous weeks.

 

Supplies of market-ready cattle are tight due to sellers earlier this spring rushing to sell cattle ahead of schedule because of profitable prices. That has left fewer steers and heifers now.

 

Analysts believe cattle supplies should increase in the months ahead because there are larger supplies of young cattle being fattened for slaughter.

 

Cash beef prices turned higher on Thursday, which triggered light buying in cattle futures. USDA quoted the average wholesale choice beef price at US$154.55 per cwt, up 8 cents from Wednesday (June 23).

 

At the CME, June live cattle futures were up 0.475 cent at 90.725 cents per lb, and August up 0.700 at 89.200. Feeder cattle futures advanced, helped by the higher live cattle futures and by an increase in cash feeder cattle prices.

 

The latest feeder cattle index price, computed for the CME, was US$110.64 per cwt, up 10 cents from Wednesday, and up from $108.61 a week ago.

 

Near mid-day, August feeder cattle were up 0.650 cent at 112.550 cents per lb and September up 0.575 at 112.600 cents.

 

Hog futures were mixed in light trading ahead of Friday's USDA hog supply report. The lead July contract was lower, possibly pressured by a downturn late on Wednesday in the cash pork market, while August advanced on light buying.

 

After the hog market closes on Friday, the USDA will release its quarterly hog inventory report and analysts predict it will to show the lowest US hog herd as of June 1 in three years.

 

Hog producers had reduced herds the past few years due to losses blamed on high feed and fuel costs and on slow meat sales due to the recession.

 

Near midday July hogs were down 0.300 cent at 81.150 cents per lb and August hogs up 0.250 cent at 84.475.