CME Feeder Cattle Prices Increase Amid Rising Corn Futures

US Livestock Market Update: March 18, 2024

Key Takeaways:

• Chicago Mercantile Exchange (CME) feeder cattle futures declined on Wednesday, while Chicago Board of Trade (CBOT) corn futures gained strength.
• CME April live cattle settled 0.175 cents higher at $1.2344 per pound, while April feeders finished down 1.075 cents at $3.58725 per pound.

Market Analysis:

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The recent strike at a JBS meatpacking plant in Greeley, Colorado, is likely to reduce U.S. beef production, exacerbating record high prices for beef. Dry weather and fires in Nebraska's pasturelands may displace tens of thousands of head of cattle, leading ranchers to slaughter parts of their herd.

Economic Impact:

The rise in crude oil prices, up over 5% on Wednesday, supports corn prices, which are a feedstock for ethanol. However, increasing corn prices make feeding cattle more expensive, supporting feeder cattle futures. Beef packer margins rose to $142.15 per head on Wednesday, up from gains of $128.90 on Tuesday and losses of $10.45 a week ago.

Commodity Prices:

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• CME lean hog futures ended up 0.025 cent at $0.9375 per pound.