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LIVESTOCK-Cattle gain on strong packer margins; profit-taking sinks hogs

06/11/2021 | 05:47pm EDT

CHICAGO, June 11 (Reuters) - Chicago Mercantile Exchange (CME) cattle futures firmed on Friday on strong beef plant margins and good demand from packers for fed cattle, traders said.

Cash beef prices have flattened after a prolonged run higher, but packers continue to make a large profit on each animal slaughtered.

"We're probably seeing that our boxed beef prices at a seasonal peak. But while that trends lower, there's still incredible margins," said Matthew Wiegand, broker with FuturesOne.

The choice boxed beef cutout value dipped 69 cents to $337.56 per cwt while the select cutout dropped $5.19 to $305.21 per cwt, according to the U.S. Department of Agriculture (USDA).

But the average beef packer margin rose to $896.70 per head on Friday, up from $752.50 a month ago and just $317.50 a year ago, according to advisory service HedgersEdge.com.

CME August live cattle futures ended up 1.475 cents at 120.025 cents per pound. August feeder cattle gained 2.775 cents to settle at 151.175 cents per pound as Chicago Board of Trade corn futures plunged.

Unwinding of cattle/hog spreads further buoyed cattle prices while pressuring lean hog futures, Wiegand said.

Hogs also retreated on Friday on profit taking ahead of the weekend and after several contracts posted life-of-contract highs this week.

Some traders believe that hog prices may have reached a near-term peak as average animal weights have risen in the closely followed Iowa and southern Minnesota market at a time when weights typically decline seasonally.

Meanwhile, falling hog prices in China amid an expanding hog herd there have sparked concerns that import demand for U.S. pork would soften in coming months, traders said.

CME July hog futures fell 1.350 cents to 119/975 cents per pound and August futures dropped 1.725 to 116.975 cents. (Reporting by Karl Plume; Editing by Will Dunham)

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.04% 0.734 Delayed Quote.-3.87%
BRITISH POUND / US DOLLAR (GBP/USD) 0.06% 1.3906 Delayed Quote.2.12%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.05% 0.8017 Delayed Quote.2.23%
CORN FUTURES (C) - CBR (FLOOR)/C1 -1.97% 547 End-of-day quote.15.29%
EURO / US DOLLAR (EUR/USD) -0.01% 1.1867 Delayed Quote.-2.65%
FEEDER CATTLE?FUTURES (GF) - CMG (ELECTRONIC)/C1 -0.27% 158.075 End-of-day quote.14.07%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.013452 Delayed Quote.-1.63%
LIVE CATTLE (LE) - CMG (ELECTRONIC)/C1 -0.31% 122.125 End-of-day quote.8.46%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.49% 0.6974 Delayed Quote.-2.36%
S&P GSCI CORN INDEX -1.88% 451.5996 Delayed Quote.15.19%
S&P GSCI FEEDER CATTLE INDEX -0.09% 191.1402 Delayed Quote.15.39%
S&P GSCI LIVE CATTLE INDEX -0.74% 434.1296 Delayed Quote.10.58%
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