CHICAGO: Chicago Mercantile Exchange live cattle futures rose on Tuesday, rallying after two-session slide as corn prices dropped and feeder cattle surged, but softening wholesale beef prices hung over the market, traders said.
Benchmark CME August live cattle futures settled up 1.900 at 172.500 cents per pound. October futures ended up 2.050 cents at 176.075 cents.
Additional support stemmed from the cash cattle market. Fat cattle traded lightly in Kansas and the Texas Panhandle at $178 to $179 per hundredweight (cwt), down a bit from last week’s average of $180, but still at a premium to August futures, at the equivalent of $172.50 per cwt.
Beef prices declined as retailers wrapped up purchases for the Fourth of July holiday, the last big grilling holiday until Labor Day. The U.S. Department of Agriculture (USDA) priced choice cuts of beef on Tuesday afternoon at $329.23 per cwt, down $3.81 from Monday and the lowest since June 8. Select cuts were down $1.24 at $298.43 per cwt.
“It feels like the beef (market) is going to stall. But the (cattle) futures market for the summer is too low versus the cash, so we are rallying,” said Don Roose, president of Iowa-based U.S. Commodities.
Feeder cattle futures jumped as falling corn prices signaled cheaper feed costs. CME August feeders gapped higher, opening above Monday’s session high, and settled up 4.825 cents at 238.500 cents per pound.
Hog futures ended mixed on Tuesday. July hogs settled up 0.725 cent at 94.125 cents per pound and most-active August hogs rose 1 cent at 91.050 cents. But October hogs fell 0.450 cent to finish at 79.775 cents.
The U.S. pork cutout rose 61 cents to $100.16 per cwt on Tuesday afternoon.
Ahead of the USDA’s quarterly hogs and pigs report on Thursday, analysts surveyed by Reuters on average expect the government to report the U.S. hog herd at 71.808 million head as of June 1, down 0.7% from a year earlier.
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