Economic - Markets
US cattle futures rise as part of broad commodity strength
According to reporting from Reuters, the benchmark April live cattle futures contract on the CME rose to 0.675 cent at 111.850 per pound after dipping to a low 116.650 in September.
CME March feeder cattle futures rose 0.375 cent to settle at 135.050 cents per pound.
"It's technically driven, speculative bargain hunting," Doug Houghton, analyst with Brock Associates, said of the higher close.
Cattle futures followed as world equity markets scaled fresh highs after China reported the lowest number of new coronavirus cases in two weeks, boosting hopes among traders that the epidemic will be contained.
Cash cattle traded in the southern Plains on Wednesday mostly at $119 per cwt, the US Department of Agriculture reported, steady with Tuesday's light trade but down $2 per cwt from last week.
But some traders said cattle futures were supported by the fact that cash values held at Tuesday's price, instead of falling further.
"That kind of gave us a line on how hard it (cash trade) was going to fall off. The markets tended to relax a little because the worst-case scenario was avoided," said Matthew Wiegand, commodity broker for FuturesOne.
However, sagging wholesale beef prices hung over the market, limiting rallies. The choice boxed beef cutout value fell $1.52 to $206.31 per cwt on Wednesday afternoon, while select cuts rose 77 cents to $205.30 per cwt.
"The fundamentals are concerning ... the choice-select spread is down to $1.01; that is not positive," Houghton said.
