CME Live Cattle Prices Decline Following Recent Rally Amid Profit-taking Activity
Cattle Futures Fall on Profit-Taking, Beef Prices Rise
CHICAGO, April 13 - Live cattle futures on the Chicago Mercantile Exchange (CME) fell on Monday as traders booked profits after the market set life-of-contract highs last week. Prices had climbed recently on strong cash markets, tight cattle supplies, and robust consumer demand for beef.
The most-active CME June live cattle sagged 0.675 cent to close at 248.525 cents per pound after reaching a contract high of 249.950 cents on Friday. The thinly traded April contract also eased after rising on Friday to 252.250 cents, an all-time high on a continuous chart of the front live cattle contract.
Comparison of Live Cattle Futures Contracts
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Contract | Closing Price (April 13) | High (April 13) | Change |
|---|---|---|---|
| CME June Live Cattle | 248.525 cents per pound | 248.525 cents per pound | -0.675 cent |
| CME April Live Cattle | 248.525 cents per pound (estimated) | 252.250 cents | -3.725 cents |
| CME May Feeder Cattle | 372.825 cents per pound | 372.825 cents per pound | +0.475 cent |
The setback could make futures look attractive to investors who think that prices could still rise further, traders said. Cattle are technically overbought, which brings on this short-term profit-taking by longs. However, dip buying seems to be the ongoing strategy in there as numbers remain tight and beef demand should begin to pick up as we move deeper into the spring.
The U.S. cattle supply has dwindled to its lowest level in 75 years after ranchers increasingly sent livestock to slaughter, instead of keeping them for breeding, due to high prices and a drought that burned up grazing lands. CME May feeder cattle futures rose 0.475 cent to 372.825 cents per pound and touched their highest price since October.
Wholesale beef prices also increased. The U.S. Department of Agriculture reported choice beef cuts at $381.92 per hundredweight, up $1.02 from Friday, and select cuts at $383.64 per hundredweight, up $2.30. Meatpacker JBS reached a labor agreement with union workers after a three-week strike disrupted operations at a massive beef plant in Greeley, Colorado, the company and union representing the workers said.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
In other news, CME lean hog futures closed lower for a fifth consecutive session. The benchmark June contract slipped 0.600 cent to 103.125 cents per pound. The U.S. Department of Agriculture quoted the wholesale pork carcass cutout at $99.14 per cwt, up $0.44 from Friday.
Investor Takeaway
Investors may see this as an opportunity to buy futures if they think prices could rise further.
More in Market
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Indian Stocks to Watch: BHEL, Agarwal Industrial, JBM Auto, Rajesh Exports, Indian Energy Exchange, Lenskart Solutions in Market Focus on June 4.
