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CME update: feeder futures gain ground while live futures remain flat

19 August 2020

US feeder cattle futures strengthened on 18 August while live cattle futures remained flat.

According to reporting in Reuters traders noted the strong boxed beef prices and improved packer margins. This kept processors pulling beef forward.

Doug Houghton, analyst at Brock Capital Management said, “the demand looks to be good in the cash market. Expectations for higher cash prices are underpinning futures pretty well."

CME benchmark October live cattle ended flat at 109.875 cents per pound, while October feeder cattle gained 1.175 cents to end at 146.375 cents per pound.

Cattle slaughter rates climbed to 120,000 head on Tuesday, up 2.6 percent from a week and a year ago.

Beef packer margins rose to $288.10 per head, from $240.65 a week ago, according to Denver-based livestock marketing advisory service

Choice cuts of boxed beef climbed $2.22 to $219.48 per cwt at midday, while select cuts increased by $3.02, to $204.96 per cwt, according to the USDA.

But consumer demand for beef remains uncertain, according to Mike Zuzolo, president of Global Commodity Analytics.

"The summer grilling season is not ending nearly as favourable or as strong as we began it. That's really where the livestock market price action is going to rest," he said. "Packers are buying for that right now."

Read more about this story here.

Source: Reuters


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