Key Moments
- CME live and feeder cattle futures finished higher on Monday, backed by strong cash cattle trade and momentum from surging U.S. equity markets.
- Cash cattle in Texas and Kansas recently traded at $255 to $256 per cwt, remaining above comparable CME live cattle futures levels below $251 per cwt.
- Hog futures ended lower as wholesale pork carcass values slipped to $97.12 per cwt, with analysts citing sluggish domestic pork consumption.
Cattle Futures Lifted by Cash Market Premium and Equity Strength
Chicago Mercantile Exchange (CME) cattle contracts ended Monday’s session in positive territory, as traders responded to relatively resilient cash cattle prices and strength in U.S. stock indices, according to analysts cited by Reuters.
The Nasdaq advanced 3% and the Dow finished at a record closing high after the United States and Iran reached a preliminary agreement to end the Middle East war and reopen the Strait of Hormuz. The resulting decline in crude oil prices eased inflation concerns and contributed to the upbeat tone across financial markets.
Don Roose, president of Iowa-based US Commodities, said that robust performance on Wall Street typically feeds into expectations for demand for higher-priced beef cuts. “It goes to the heart of the demand side…. People are feeling a little more stable with their finances,” Roose said.
Cash Cattle Maintain Premium to Futures
Roose noted that while cash cattle trade cooled modestly in the most recent week, it continued to command a premium over futures, creating the perception that futures were undervalued. “The discounts are too big versus the cash,” Roose said.
Market-ready cattle in Texas and Kansas changed hands late last week at around $255 to $256 per hundredweight (cwt), slightly below the prior week’s $256 to $258 range. Even so, these levels remained above CME live cattle futures, which were trading below the equivalent of $251 per cwt.
| Market | Location/Contract | Price | Timing/Change |
|---|---|---|---|
| Cash cattle | Texas & Kansas | $255 – $256 per cwt | Late last week |
| Cash cattle (prior week) | Texas & Kansas | $256 – $258 per cwt | Prior week |
| CME live cattle | Below cash-equivalent | Below $251 per cwt equivalent | Recent futures trade |
Live and Feeder Cattle Settle Higher
On the board, thinly traded CME June live cattle futures settled on Monday at 250.625 cents per pound, up 0.750 cent for the session. The most-active August live cattle contract closed 2.075 cents higher at 243.250 cents per pound.
CME August feeder cattle futures also gained ground, finishing 4.125 cents higher at 361.550 cents per pound.
Beef Prices Support Cattle Complex
Firm wholesale beef values added further support to cattle prices. The U.S. Department of Agriculture (USDA) on Monday afternoon quoted choice beef cuts at $395.05 per cwt, an increase of $3.12 from Friday.
| Product | Price | Change vs. Friday |
|---|---|---|
| Choice beef cuts | $395.05 per cwt | +$3.12 |
Hog Futures Weighed Down by Weak Pork Demand
In contrast to cattle, CME hog futures finished Monday lower as wholesale pork prices continued to soften.
The USDA on Monday afternoon priced pork carcasses at $97.12 per cwt, down 27 cents from Friday. Roose attributed the pressure in hog markets to lackluster domestic demand, stating, “Domestic consumption continues to be slow.”
CME July lean hog futures settled at 96.575 cents per pound, down 0.875 cent on the day. The most-active August lean hog contract ended 0.575 cent lower at 95.775 cents per pound.
| Contract | Settlement Price | Daily Change |
|---|---|---|
| CME July lean hogs | 96.575 cents/lb | -0.875 cent |
| CME August lean hogs (most-active) | 95.775 cents/lb | -0.575 cent |
| Pork carcasses (USDA) | $97.12 per cwt | -0.27 |
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