April lean hogs settle up - CME
Cattle futures surge to record highs on tight supply
27 January 2025
2 minute read
By: Chicago Mercantile Exchange (CME) live cattle and feeder cattle futures surged to lifetime highs on Friday as high cash prices and tight supplies boosted prices, reported Reuters.
Strong consumer demand for beef and the constricted US supply have sent cash cattle prices soaring, traders said.
"Futures have been driven by the cash market, which has gone freaking ballistic vertical," said Dennis Smith, broker at Archer Financial Services.
Cash prices for fed cattle topped $200 per cwt this week, brokers said.
Consumer demand has remained resilient, in part due to low unemployment numbers and strong equities markets that have made US shoppers more willing to splurge on beef, analysts said.
"Demand is far better than what anyone realized, and packers are competing against each other for available supplies to meet that demand," Smith said.
Freezing weather gripping much of the US Plains has also meant feedlots are holding on to cattle for longer before sending them to slaughter, while waiting for them to gain weight, analysts said. This further constricts an already-tight cattle supply, they said. Cattle gain weight more slowly in cold weather.
Most-active CME April live cattle contract ended up 2.3 cents at 203.025 cents per pound. All live cattle contracts reached lifetime highs for the third trading day in a row.
CME March feeder cattle settled up 2.5 cents at 276.575 cents per pound, with all contracts notching lifetime highs.
The US Department of Agriculture, in a report released after the market's close, said placements of cattle in feedlots in December fell 3% from the previous year. Analysts expected no change.
The decline is partly due to the stoppage of cattle imports from Mexico, after the US blocked shipments in November over the discovery of the New World screwworm pest in Mexico, Smith said. When the border reopens to cattle imports, traders expect the flow of cattle will still be slowed due to extra safety protocol.
In lean hog futures, CME April hogs settled up 1 cent at 88.2 cents per pound.
