CME cattle futures rally on beef price surge and technical buying
Chicago Mercantile Exchange cattle futures saw a rally on Tuesday, driven by higher wholesale beef prices and technical buying. The market broke out of a recent narrow range as prices surged on strong demand signals. Analysts pointed to rising equities markets, lower crude oil prices, and reduced expectations of a Federal Reserve interest rate hike later this month as key factors supporting the rally.
Wholesale beef prices jumped significantly on Monday and again on Tuesday, boosting beef packer margins. The US Department of Agriculture reported the choice boxed beef cutout at $378.93 per hundredweight on Tuesday, up 67 cents from the previous day. Beef packer margins expanded to $108.85 per head, a notable increase from $59.65 on Monday, according to HedgersEdge.
Actively traded CME December live cattle futures rose 4.125 cents to settle at a three-week high of 224.100 cents per pound. November feeder cattle gained 8.150 cents to close at 338.275 cents per pound, the contract's highest point since mid-July. Technical buying accelerated gains as prices broke through key moving averages and recent highs.
In contrast, CME lean hog futures ended mostly weaker, retreating from prior-session gains as traders took profits. December hogs fell 0.575 cents to close at 70.375 cents per pound.