Nearby CME hog futures close modestly higher

Chicago Mercantile Exchange (CME) live cattle futures ended higher on Tuesday as wholesale beef prices rose, bucking seasonal trends and spurring hopes for higher cash cattle prices this week.

CME August live cattle futures settled up 0.100 cent at 135.725 cents per lb and most-active October ended up 0.500 cent at 141.100 cents. In the feeder cattle market, August feeders rose 2.075 cents to finish at 178.750 cents per lb, benefiting from a drop in corn futures.

Wholesale prices for choice cuts of beef hit their highest level since April, defying the normal seasonal tendency for demand to slow in mid-summer. Choice cuts of boxed beef rose by $2.02 on Tuesday to $272.57 per hundredweight, according to the US Department of Agriculture (USDA), and select cuts were up $1.07 at $243.73 per cwt.

“The (beef) cutout values are higher here, so it has everybody thinking we are going to see strengthening in the cash (cattle) markets,” said Brian Hoops, president of Midwest Market Solutions.

Traders were positioning ahead of Friday’s monthly USDA Cattle on Feed report.

However, analysts on average put the total number of US cattle on feed as of 1 June at 11.301 million head, 100.1% of a year ago. June marketings were seen at 101.9% of a year ago.

Scorching temperatures in the southern Plains this week are prompting some producers to move cattle from parched grazing pastures into feedlots or slaughterhouses, Hoops said. Read full story The USDA will report on July feedlot placements in its 19 August report.

Nearby CME hog futures closed modestly higher, supported by firm cash hog markets and rising wholesale pork prices.

The USDA quoted the US pork carcass cutout value at $125.12 per cwt on Tuesday afternoon, the highest since mid-August of last year.

August lean hogs settled up 0.700 cent at 112.825 cents per lb and October hogs ended up 0.125 cent at 94.500 cents.

Tags: prices, Beef, cattle, futures, live cattle, markets, feeder cattle