Live cattle futures at the Chicago Mercantile Exchange saw a boost on Friday, marking a second consecutive day of gains. This upward trend was attributed to tight supplies of U.S. cattle and a surge in Wall Street equity markets, which indicated robust consumer demand for beef, according to brokers.
CME October live cattle futures closed up by 1.200 cents at 233.575 cents per pound, with December futures following suit, rising 1.575 cents to 235.725 cents. October feeder cattle also saw an increase, climbing 2.375 cents to finish at 354.100 cents per pound.
After the market closed, the U.S. Department of Agriculture released monthly feedlot data, which aligned closely with trade expectations. The USDA reported that as of September 1, there were 11.1 million cattle in U.S. feedlots, reflecting a 1.05% decline from the previous year. Analysts had anticipated a slightly smaller decrease of 0.9%. Further insights from the USDA revealed that August feedlot placements amounted to 90% of the previous year’s figures, which fell short of the average estimate of 91%. Additionally, August marketings were reported at 86% of year-ago levels, lower than the expected 87.2%.
Dan Norcini, an independent trader, commented on the USDA’s report, stating that it does not alter the prevailing dynamics in the cattle market. “We are still producing a lot less beef, and I just don’t see that changing any time soon, based on these numbers,” he noted.
As the summer grilling season comes to an end, wholesale beef prices continue to decrease from the near-record highs experienced in early September. The USDA announced that choice cuts of beef were priced at $382.05 per hundredweight (cwt) on Friday, down $3.76 from the previous day. Nonetheless, a strong performance from Wall Street’s main indices signals positive consumer demand for beef. For the week, the S&P 500 rose 1.2%, the Nasdaq climbed 2.2%, and the Dow added 1.05%. Norcini remarked, “The stock market is still strong. People are making good money on the high end, and they are going to pay up for beef.”
In related market activities, CME lean hog futures closed mostly higher, although the most-active December contract saw a slight decline. October hogs ended the day up 0.500 cent at 97.975 cents per pound, while December hogs fell by 0.075 cent to 87.625 cents. The USDA reported the hog carcass cutout price at $112.05 per cwt on Friday afternoon, reflecting a 10-cent increase from Thursday’s figures.
