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CME update: economic optimism gives bump to cattle futures

05 June 2020

US live cattle futures firm for a second day on 4 June on technical buying and hopes of an economic upswing.

Reuters reports that the gains in nearby contracts were behind those in deferred months as the backlog of market-ready cattle and falling wholesale beef prices hung over the market.

CME June live cattle futures settled up 0.275 cent at 95.725 cents per pound and benchmark August rose 0.575 cent at 97.925 cents, while the December contract ended up 1.050 cents at 105.025 cents.
CME August feeder cattle futures closed up 0.500 cent at 134.725 cents per pound.

"The overall economic optimism right now is helping," said Doug Houghton, analyst at Brock Capital Management.

Cash cattle traded as low as $105 per hundredweight in the southern Plains on Thursday, the USDA reported, down $5 to $12 per cwt from a day earlier. Yet the cash price represented a significant premium over nearby futures, a factor that supported the spot June contract.

Still, wholesale beef prices continued to retreat from last month's record highs as the US slaughter pace recovered, generating more beef supplies.

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