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CME update: nearby cattle futures sink on profit-taking

02 October 2020

US live cattle futures had a mixed trading day on 1 October with nearby contracts lowering on profit-taking after the December benchmark contract reached a six-week high.

Reuters reports that commodity funds hold a net long position in Chicago Mercantile Exchange (CME) live cattle futures, leaving the market vulnerable to bouts of long liquidation.

But brisk demand for beef underpinned values, and traders also said that market-ready cattle traded lightly in the cash market at $107 per cwt, up $1 to $2 from last week.

Packer margins for cattle were hovering around $300 per head, according to Denver-based livestock marketing advisory service HedgersEdge.com, encouraging meat packers to spend more to buy cattle from feedlots.

"The margins are there to support them paying, being able to make money while they can," said Matthew Wiegand, a broker at FuturesOne.

Chicago Mercantile Exchange October live cattle settled down 0.025 cent at 108.525 cents per pound and most-active December ended down 0.525 cent at 111.825 cents, a day after reaching its highest since 20 August.

CME November feeder cattle settled down 0.800 cent at 141.250 cents per pound.

Rising prices for corn, the main cattle feed grain, pressured CME feeder cattle futures for a second day, after the US Department of Agriculture (USDA) on Wednesday 30 September reported tighter-than-expected quarterly US corn stocks.

Read more about this story here.

Source: Reuters



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