November 26, 2019
Live cattle futures rise to a 7-month high on the Chicago Mercantile Exchange
Traders cite monthly US feedlot data and spillover strength from Wall Street equity markets record highs, reported Reuters.
The Chicago Mercantile Exchange (CME) reported 123.150 cents per pound for February live cattle futures, up 1.300 cents. This is after it reached 125.825 cents, the highest for the contract since April 23, 2019. For December front month, prices ended 119.700 cents, up 1.025 cents.
Prices for CME January feeder cattle futures hit 141.975 cents per pound, up 2.700 cents.
According to the United States Department of Agriculture (USDA), October placements of cattle in US feedlots are at 2.477 million head. This is an increase of 10% compared to 2018, but still under the average trade estimate of an 11.4% increase.
Jeff French, Top Third Ag Marketing analyst in Chicago said the USDA report was not as bearish as expected.
As positive signs for progress are expected for US and China trade talks, all of Wall Street's three major averages started off trading week with record high closes.
French said outside markets being strong will spill over to the cattle market. He added that when stock markets are strong, consumers are prone to purchasing more expensive cuts of beef.
Also supporting the high cattle prices on the CME was a storm forecast from the National Weather Service, which expects snow and high winds to hit the central plains like Nebraska and Kansas on November 26, 2019 - the two states are major cattle feedlot areas.