2023-09-08 21:43:53
Feeder cattle futures and delayed live cattle futures reached new highs Friday as limited U.S. supplies continued to boost prices.
U.S. cattle inventories have fallen to their lowest levels in decades as producers reduced their herds last year as drought reduced pasture availability.
“It’s a bull market,” said Scott Varilek, a broker at Kooima Kooima Varilek Trading. “The supply is very limited.
October feeder cattle futures closed 0.275 cents higher at 259.150 cents per pound on the Chicago Mercantile Exchange and hit a high of 259.650 cents.
Live Cattle hit highs in the June 2024 and August 2024 contracts. Nearby, October Live Cattle finished 0.425 cents lower at 183.225 cents per pound, a day following hitting its highest price high since July 20.
This week’s gains indicate that cash cattle prices are expected to rise, according to brokers. They added that producers are willing to delay sales to processors to wait for higher prices.
Meat processors make money processing livestock, which helps support demand, brokers say. As of Friday, their estimated margins were $59 per head of cattle, down from $72.45 on Thursday and $59.35 a week ago, according to HedgersEdge.com.
Slaughterhouses slaughtered regarding 125,000 cattle, compared to 122,000 a week ago and 128,000 a year ago, according to the U.S. Department of Agriculture. Boxed beef prices increased $1.24 for prime cuts, to $312.90 per hundredweight, the USDA said separately.
High beef prices reduced U.S. export demand following livestock supplies tightened. Weekly U.S. beef export sales for 2023 were 11,900 metric tons, down 34% from the previous week and 20% from the previous four-week average, the company said. USDA.
For pork, U.S. weekly export sales were 26,300 metric tons for 2023, down 29% from the previous week and 13% from the previous four-week average.
CME October lean hog futures finished 1.300 cents lower, at 81.525 cents per pound, following hitting their lowest price since Aug. 30, at 80.950 cents. (Reporting by Tom Polansek in Chicago; Editing by Shailesh Kuber)
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