Chicago Mercantile Exchange (CME) live cattle futures rose on Friday in tandem with higher equities and energy markets as a robust slaughter pace and concerns about reduced cattle supplies in the coming months fuelled buying, reported Reuters.
Packers have accelerated their daily slaughter pace following plant downtime around Monday’s Labor Day holiday and they were seeking replacement supplies of cattle.
Meanwhile, drought in the southern Plains has scorched grazing pastures and triggered a larger-than-normal cull of the breeding herd, a sign that beef cattle supplies will tighten and remain tight next year and beyond.
“It was partially risk-on trade spilling over into livestock markets. But we’ve had a very strong cattle market in the daily slaughter numbers all week,” said Mike Zuzolo, president of Global Commodity Analytics.
“That kind of higher level of slaughter suggests there’s pretty moderate packer demand out there,” he said.
The US Department of Agriculture (USDA) estimated the week’s cattle slaughter through Saturday at 604,000 head, up from 579,000 head in the same week last year.
A USDA report issued on Thursday also confirmed that the fed cattle slaughter in the week before Labor Day was the largest for any week so far this year, analysts said.
Benchmark CME October live cattle rose 1.300 cents to 145.675 cents per lb and December gained 1.325 cents to close at 150.975 cents per lb.
Feeder cattle followed higher live cattle, despite rising corn feed prices on Friday. October feeders ended at 185.575 cents per lb, up 1.175 cents.
Lean hog futures also rose on Friday in a technical and short-covering bounce, following a recent slide in cash market prices.
CME October lean hogs added 1.050 cents to settle at 93.175 cents per lb, while December hogs gained 0.450 cent to 83.125 cents per lb.