By Tom Polansek
CHICAGO, Nov 9 (Reuters) – The U.S. Department of Agriculture on Tuesday raised its forecast for beef production and cattle prices in 2021 and 2022 due to strong demand and heavier livestock.
Robust sales of U.S. beef to domestic consumers and overseas buyers have helped support Chicago Mercantile Exchange (CME) cattle futures.
The USDA, in a monthly report, raised its 2021 beef production forecast by 0.2% from October to 27.885 billion pounds, citing larger expectations for slaughtering of fed cattle and heavier carcass weights.
The agency raised its average price estimate for cattle by 0.2% to $121.31 per cwt.
CME December live cattle futures LCZ1 ended up 0.100 cent at 132.200 cents per pound on Tuesday, after rising on Monday to their highest since Sept. 3 at 132.500 cents.
The most actively traded January feeder cattle contract FCF2 slipped 0.600 cent to settle at 159.800 cents per pound. The contract matched its Monday high of 160.600, which was the highest price since Oct. 27.
Traders said they are waiting to see whether cash prices for fed cattle strengthen this week as they did toward the end of last week in a sign of demand from meatpackers.
Profit margins for beef processors eased to $561 per head of cattle from $579.05 per head on Monday and $569.55 a week ago, marketing advisor HedgersEdge.com said.
Boxed beef prices slipped by 0.85 cent for choice cuts to $287.80 and rose by $2.02 to $270.62 per cwt for select cuts, the USDA said in a daily report.
“The boxed beef rally has kind of cooled off,” said Matt Wiegand, a commodity broker for FuturesOne.
For pork, the USDA raised its 2021 production forecast from October and lowered its annual price forecast for hogs in the monthly report.
In CME lean hog futures, the benchmark December contract LHZ1 settled 1.425 cents lower at 74.950 cents per pound.
(Reporting by Tom Polansek in Chicago; Editing by Vinay Dwivedi)
(([email protected]; https://twitter.com/tpolansek))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com