CHICAGO, May 7 (Reuters) - Chicago Mercantile Exchange
cattle futures rose on Friday on strong beef prices and demand
for red meat that also catapulted margins for beef processors.
Meat demand is high as federal stimulus checks have
increased incomes and prompted consumers to spend more at
supermarkets and restaurants, analysts said. COVID-19
vaccinations are also prompting people to eat out more, they
Prices for select cuts of beef shipped to wholesale buyers
in large boxes increased by $0.91 to $209.27 per cwt, according
to the U.S. Department of Agriculture. Prices for choice cuts
eased by $0.49 to $305.88 per cwt after climbing recently.
"People want to pay up for steaks," said Ted Seifried, chief
ag market strategist at The Zaner Ag Hedge Group. "People want
CME June live cattle futures ended up 0.550 cent at
116.025 cents per pound and touched their highest price since
April 21. The contract recovered slightly after sliding 10% from
April 8 to May 4.
August feeder cattle futures finished 0.875 cent
higher at 144.275 cents per pound. It also suffered a 10% slide
over the past month.
With demand strong, margins for beef packers reached $732.80
per head, up from $651.10 a week ago, according to livestock
marketing advisory service HedgersEdge.com.
Feedlot operators are angry they are missing out on such
huge profits, brokers said, as feeders' margins are being hurt
by soaring costs for grains used for feed.
"A big problem in the market is the packers have too big a
margin," said Don Roose, president of Iowa-based commodities
brokerage U.S. Commodities.
Starting June 1, CME will raise the daily trading limit for
feeder cattle futures to 6.25 cents per pound from 5 cents,
according to the exchange. The live cattle limit will increase
to 5 cents from 4 cents.
In the pork market, CME most-active June lean hogs
fell 1.625 cents to 112.850 cents per pound in a retreat from
(Reporting by Tom Polansek in Chicago; editing by Diane Craft)