2023-09-11 21:07:58
Feeder cattle and deferred live cattle futures rose to new highs Monday, as insufficient U.S. supply for next year continues to fuel the bull market, traders say.
Even the Chicago Mercantile Exchange’s October and December live cattle futures surged to within a dollar of their contract highs, fueled by optimism in the cash market and investors betting that problems supply will expand.
“The investor crowd has been long for a while, and it’s getting longer,” particularly on the feeder cattle side, said Ross Baldwin, a cattle analyst at John Stewart & Associates.
Although beef exports have been sluggish, domestic demand has remained stable, helping to support prices, said Karl Setzer, head of brokerage research for Mid-Co Commodities.
Traders should closely monitor production and demand updates for the pork and beef markets in the U.S. Department of Agriculture’s monthly global agricultural supply and demand estimates, which are expected to be published Tuesday.
As U.S. cattle inventories hit their lowest level in decades due to drought, analysts said investors are already anticipating supply problems in the beef sector for well into the future. part of next year.
Boxed beef prices ended lower Monday, with choice cuts losing $2.79 to $310.11 per hundredweight, while choice cuts lost 61 cents to $285.44 per hundredweight, according to the USDA .
All CME feeder cattle futures reached new highs on Monday. October feeder cattle futures settled 2.300 cents higher at 261.450 cents per pound, and reached a session high of 261.650 cents.
Nearby, October live cattle finished up 1 cent at 184.225 cents per pound. During the session, the contract reached $184,800 – the highest price since July 20.
CME October lean hog futures settled 1.025 cents higher at 82.550 cents per pound. (Reporting by PJ Huffstutter in Chicago.)
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