CHICAGO, March 29 (Reuters) - Benchmark live cattle futures on the Chicago Mercantile Exchange climbed to a contract high on Monday, led by firming wholesale beef prices as the summer grilling season approaches with the U.S. economy seems poised to rebound from the coronavirus pandemic, traders said.
Feeder cattle futures also set contract highs.
CME April live cattle settled up 0.875 cent at 120.975 cents per pound while most-active June futures ended up 0.875 cent at 122.650 cents, after reaching a contract high at 123.500 cents.
CME May feeder cattle finished 2.325 cents higher at 152.200 cents per pound, after setting a contract high at 153.175 cents.
“We have seen a significant uptake in wholesale beef prices,” said Altin Kalo, agricultural economist for Steiner Consulting.
Beef prices have been rising since mid-March and the trend continued on Monday, with choice cuts of boxed beef rising $1.87 to $239.53 per cwt, according to the U.S. Department of Agriculture. Select cuts jumped $4.73 to $232.50 per cwt.
“Some of the gains that we were penciling in for mid to late April are here right now,” Kalo said.
The strength in beef has helped lift packers’ profit margins, fueling expectations for market-ready cattle to trade higher in cash markets this week. Packer margins rose to $369.65 per head on Monday, up from $326.95 a week ago, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
In the hog markets, CME lean hog futures closed lower in a round of profit-taking after contract highs set on Friday.
CME April lean hogs ended down 0.425 cent at 100.375 cents per pound, and most-active June hogs settled down 0.375 cent at 105.225 cents.
Commodity funds hold a large net long position in CME lean hog futures, leaving the market open to bouts of long liquidation.
However, firming cash hog prices, expectations of tightening U.S. hog supplies and brisk domestic and export demand for pork kept a floor under the market.
Reporting by Julie Ingwersen, Editing by Sherry Jacob-Phillips
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