CME update: cattle futures rise on technical and bargain buying
US live cattle futures advanced for a third straight session on 11 December, supported by technical and bargain buying.
14 December 2020
2 minute read
Reuters reports that the advance in cattle futures could also be attributed to strong packer margins, potentially keeping a floor under cash cattle prices.
Futures markets rose despite some demand concerns as soaring US coronavirus infection rates triggered lockdowns that impact restaurant traffic, and as negotiations over a new pandemic relief bill stalled.
Chicago Mercantile Exchange (CME) February live cattle futures ended 1.400 cents higher at 113.250 cents per pound after breaking through technical chart resistance at its 100-day moving average. January feeder cattle jumped 2.125 cents to 139.725 cents per pound.
Cash cattle at Plains feedlot markets traded lower last week, but sales volumes were lighter than normal. Some traders and analysts believe cash prices could be steady to higher next week.
"We have not built the show lists up. We are running pretty tight on available cattle for the packer so next week he's probably going to have to come hunting for more cattle to fill his needs, especially with the New Year's holiday coming," said Mike Zuzolo, president of Global Commodity Analytics.
Retail beef demand was strong as prices have declined and grocers have been offering specials, he said.
The choice boxed beef cut-out fell 71 cents to $213.88 per cwt on 11 December, while choice cuts dropped $2.76 to $195.71 per cwt, according to the US Department of Agriculture (USDA). Both were the lowest in a month.
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Source: Reuters
