By Jamie Martin
This Friday, the Chicago Mercantile Exchange (CME) reported a stable closure for cattle futures, despite a tumultuous week influenced by technical sell-offs and economic uncertainties.
Traders anticipated pre-weekend positioning, contributing to the market’s resilience. The USDA revealed that cattle placements in feedlots have increased by 6% in July, surpassing analyst expectations of a 3.2% rise.
Lower corn prices have been beneficial for feedlots, improving the profitability of selling cattle to processors. According to Don Roose, president of US Commodities, the favorable crush margins on cattle due to falling corn values have stimulated the market, encouraging investments in feeder cattle.
In the livestock sector, prices for choice cuts of boxed beef climbed, indicating a positive trend, whereas prices for select cuts showed a decline. The upcoming Labor Day holiday is expected to bolster beef demand, providing further support to the market.
In parallel, hog futures have experienced a notable increase, driven by higher demand for US pork in China and a weakening dollar, enhancing the competitiveness of US pork exports. October lean hog futures at the CME closed up at 80.55 cents per pound.
The USDA’s monthly report highlighted a reduction in US frozen pork supplies, with pork bellies showing a significant decrease of 17% from the previous year, hinting at tightening market conditions.
These dynamics underscore the interconnectedness of agricultural commodities and global market forces, shaping the outlook for U.S. livestock markets as they navigate through economic and supply chain variables.
Photo Credit: gettyimages-jessicahyde
Categories: National