CME update: cattle futures slip after steady climb

US live cattle futures stepped back on 17 August in profit taking ahead of the USDA’s Cattle on Feed report.
calendar icon 18 August 2020
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Reuters reports that live cattle futures fell for the first day after eight straight sessions of gains.

According to Matthew Wiegand, risk management consultant at FuturesOne, the correction reflects uncertainty about the USDA findings in the 21 August Cattle on Feed report.

"We’ve still been running a little bit behind the year-ago pace on packer runs. There’s maybe a little residual concern until we see that number at the end of the week," he said.

Beef slaughter rates climbed to 117,000 head on Monday, up 3.5 percent from a week ago and 1.7 percent more than a year ago.

Meanwhile, beef packer margins climbed Monday to $265.55 per head, the highest since 14 July, according to Denver-based livestock marketing advisory service

Choice cuts of boxed beef climbed $2.17 to $216.41 per cwt, while select cuts increased by $2.01, to $201.30 per cwt, according to the US Department of Agriculture.

Wiegand said the live market still has upside potential, as packers show signs they need more cattle.

"They should have incentive to get out there and keep bidding to pull cattle forward a little bit for their uncovered need," he said.

CME October live cattle fell 0.350 cent to settle at 109.875 cents per pound. September feeder cattle slipped 2.175 cent to 144.4 cents per pound.

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Source: Reuters

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