Key Moments
- CME cattle futures reached new contract highs during the session before closing lower on profit-taking and weaker wholesale beef prices.
- Boxed beef values declined, while packer margins deteriorated further, with estimated losses widening to $197.95 per head.
- June lean hog futures on the CME fell 1 cent to 101.275 cents per pound amid ongoing technical resistance and demand worries.
Cattle Futures Pull Back After Setting New Highs
Chicago Mercantile Exchange (CME) cattle futures climbed to fresh contract highs on Friday before reversing course to finish lower, as traders booked profits and weakening wholesale beef prices weighed on sentiment, according to Reuters, citing market analysts.
Analysts noted that the absence of new market drivers limited further upside, although the contracts remained supported by recent firmness in the cash cattle market and indications of solid consumer interest as the U.S. grilling season approaches.
Wholesale Beef Prices and Packer Margins Under Pressure
Boxed beef cutout values slipped on Friday morning. Choice cuts were quoted 24 cents lower at $389.28 per hundredweight (cwt), while select cuts declined $1.65 to $389.52 per cwt, based on data from the U.S. Department of Agriculture.
Beef processor profitability deteriorated further. Denver-based livestock marketing advisory firm HedgersEdge.com LLC estimated that packers lost $197.95 per head of cattle slaughtered on Friday, compared with losses of $187.30 per head on Thursday and $192.50 per head one week earlier.
| Metric | Price / Value | Change | Reference Period |
|---|---|---|---|
| Choice boxed beef cutout | $389.28 per cwt | Down $0.24 | Friday morning |
| Select boxed beef cutout | $389.52 per cwt | Down $1.65 | Friday morning |
| Packer margin (Friday) | -$197.95 per head | Worse than -$187.30 (Thursday) and -$192.50 (week earlier) | Daily comparison |
CME Live and Feeder Cattle Price Action
On the board, June live cattle at the CME settled 1 cent lower at 253.00 cents per pound after notching a new contract high earlier in the session.
In the feeder cattle segment, August feeder cattle futures closed 1.350 cents lower at 372.175 cents per pound, and May feeder cattle futures finished down 1.25 cents at 371.400 cents per pound. Both feeder contracts also established new highs before pulling back.
| Contract | Exchange | Settlement Price (cents/lb) | Change | Session Note |
|---|---|---|---|---|
| June live cattle | CME | 253.00 | Down 1 cent | Hit a new contract high intraday |
| August feeder cattle | CME | 372.175 | Down 1.350 cents | Set a new high during the session |
| May feeder cattle | CME | 371.400 | Down 1.25 cents | Also reached a new high intraday |
Lean Hog Futures Weighed Down by Demand Concerns
CME lean hog futures came under pressure as well, as contracts faced technical resistance for a second consecutive day amid worries about consumer demand heading into the grilling season.
Benchmark June lean hog futures eased 1 cent to settle at 101.275 cents per pound in what analysts described as technical trading.
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