By Karl Plume
CHICAGO, June 11 (Reuters) – Chicago Mercantile Alternate (CME) cattle futures firmed on Friday on robust beef plant margins and good demand from packers for fed cattle, merchants mentioned.
Money beef costs have flattened after a protracted run larger, however packers proceed to make a big revenue on every animal slaughtered.
“We’re most likely seeing that our boxed beef costs at a seasonal peak. However whereas that developments decrease, there’s nonetheless unbelievable margins,” mentioned Matthew Wiegand, dealer with FuturesOne.
The selection boxed beef cutout worth dipped 69 cents to $337.56 per cwt whereas the choose cutout dropped $5.19 to $305.21 per cwt, in accordance with the U.S. Division of Agriculture (USDA).
However the common beef packer margin rose to $896.70 per head on Friday, up from $752.50 a month in the past and simply $317.50 a 12 months in the past, in accordance with advisory service HedgersEdge.com. LIV/H
CME August reside cattle futures LCQ1 ended up 1.475 cents at 120.025 cents per pound. August feeder cattle FCQ1 gained 2.775 cents to settle at 151.175 cents per pound as Chicago Board of Commerce corn futures plunged.
Unwinding of cattle/hog spreads additional buoyed cattle costs whereas pressuring lean hog futures, Wiegand mentioned.
Hogs additionally retreated on Friday on revenue taking forward of the weekend and after a number of contracts posted life-of-contract highs this week.
Some merchants imagine that hog costs might have reached a near-term peak as common animal weights have risen within the carefully adopted Iowa and southern Minnesota market at a time when weights sometimes decline seasonally.
In the meantime, falling hog costs in China amid an increasing hog herd there have sparked considerations that import demand for U.S. pork would soften in coming months, merchants mentioned.
CME July hog futures LHN1 fell 1.350 cents to 119/975 cents per pound and August futures LHQ1 dropped 1.725 to 116.975 cents.
(Reporting by Karl Plume; Enhancing by Will Dunham)
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