Economic - Markets
CME update: live cattle futures continue to rally
Reuters reports that meat companies are slaughtering more livestock after supplies were restricted this spring.
The number of livestock being killed each day has recovered from April and May, when processors had to temporarily idle operations due to coronavirus outbreaks among meat plant workers.
Meat plants have now resumed operations, but many are still operating at reduced capacity. Farmers still face a backlog of animals that couldn’t be processed during the height of them pandemic, analysts said.
"There's still not space for everybody who wants to send cattle at a given time," said Matt Wiegand, broker for FuturesOne. "It's still not a 100 percent functioning market."
Processors slaughtered an estimated 117,000 cattle on Monday, up from 116,000 a week earlier and down from 122,000 a year ago, according to the US Department of Agriculture. In March, prior to the plant shutdowns, they were killing up to 124,000 a day.
Across the processing sector for cattle, hogs and chickens, facilities are operating at more than 95 percent of their average capacity compared to a year ago, according to the USDA.
Chicago Mercantile Exchange (CME) June live cattle futures settled up 2.200 cents at 96.325 cents per pound. Benchmark August jumped 1.475 cents to 97.800 cents and set a one-week high, after hitting a one-month low on Friday.
CME August feeder cattle futures closed 1.175 cents higher at 134.250 cents per pound.
