CME cattle futures up on strong demand
By Heather Schlitz
CHICAGO, Oct 22 (Reuters) -Chicago Mercantile Exchange cattle futures rose on Tuesday on signs of increased demand from U.S. consumers and exporters, analysts said.
Lean hog futures also rose as relatively low numbers of slaughter-ready hogs left buyers scrambling and willing to pay higher prices for pork.
Consumers remain willing to pay up for beef at grocery store counters even as wholesale beef prices have been hovering at record highs, Dennis Smith, analyst at Archer Financial Services, said.
"The strong demand for beef at these price levels is something I just don't understand," Smith said.
CME December live cattle LCZ24 ended up 1.300 cents at 188.125 cents per pound, while November feeder cattle futures FCX24 settled up 2.325 cents at 248.925 cents per pound.
CME December lean hog futures LHZ24 rose 0.85 cent to finish at 79.125 cents per pound.
Positive economic data released within the past month has shown cooling inflation and solid jobs numbers, painting a picture of a relatively strong U.S. economy.
Strength in wholesale prices gave futures a boost, as well. The choice boxed beef cutout rose $1.10 to $323.96 per hundredweight, according to the U.S. Department of Agriculture on Tuesday afternoon. Select boxed beef prices lost $1.41 to $294.80 per cwt.
Meatpacker margins are in the black as slower slaughter rates and heavier cattle have forced end users to pay higher prices, analysts said.
Meanwhile, an E. Coli outbreak linked to McDonald's Quarter Pounder burgers has sickened 49 people and killed one person.
The news, which was released after the close of trade, could pressure cattle futures on Wednesday by raising concerns about demand for beef, a trader said.
McDonald's has proactively removed fresh beef patties and onions used for quarter pounders from stores in states affected by the outbreak, the company informed the CDC.
Reporting by Heather Schlitz; Editing by Mohammed Safi Shamsi
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