Chicago Mercantile Exchange cattle futures climbed on Tuesday as investors looked for safety amid weaker broader markets.
“With oil prices giving up gains the last couple days, the reverse happened in cattle,” said Altin Kalo, Economist at Steiner Consulting Group.
CME’s most-active June live cattle added 1.100 cents to 136.800 cents per lb, while April feeder cattle firmed 0.200 cents to 162.600 cents.
Oil prices fell more than 6% on Tuesday, reaching their lowest in almost three weeks as surging COVID-19 cases in China spurred demand concerns.
Funds have begun reinvesting in the cattle markets after selling off last week on fears that inflation and higher fuel and feed prices could dampen consumer demand, Kalo said.
U.S. boxed beef prices were mixed, with choice cuts gaining $2.39 to $257.90 per cwt, the USDA said, while select cuts eased $1.10 to $248.84 per cwt.
Cattle slaughter maintained recent processing pace, with 125,000 head slaughtered.
Gains in nearby hog futures were muted, though summer-month contracts saw stronger gains on the hope of strong demand.
“The expectation is still for tight supplies in the summer, and good demand helping prop up the market,” said Kalo.
CME April lean hog futures added 0.200 cents to end at 102.400 cents per pound. June hogs firmed 0.725 cents to finish at 120.075 cents per pound.
The CME’s lean hog index, a two-day weighted average of cash hog prices, climbed 1.050 cents to 120.400 cents per pound.