CHICAGO, Aug 15 (Reuters) – Chicago Mercantile Exchange cattle futures rallied on Friday on soaring beef prices and tight supplies of cattle as imports from Mexico remain suspended due to the spread of New World screwworm south of the border.
The U.S. Department of Agriculture on Friday announced it would spend $750 million to build a facility in Texas that produces sterile flies to fight the flesh-eating livestock pest.
Feeder cattle futures extended gains on the news as some traders had expected the agency to ease import restrictions when USDA Secretary Brooke Rollins said earlier in the week she would be making a “major announcement” about screwworm.
“You had the screw worm updates, and obviously trade didn’t take them as bearish. We’re making progress, such as with the production facility, but the border is still closed and there’s no timeline on that. It’s easy to see buyers come back in,” said Matthew Wiegand, broker at FuturesOne.
CME October live cattle futures ended 3.825 cents higher at 230.650 cents per pound after rising to within 0.975 cent of a contract high posted last week. September feeder cattle jumped 6.325 cents to 347.350 cents per pound.
Soaring wholesale beef prices kept cattle futures well supported.
The choice boxed beef cutout value was up $6.78 on Friday at $400.57 per hundredweight (cwt), the highest since the early days of the Covid pandemic in May 2020, according to USDA data. The select beef cutout was up $3.88 at $370.76 per cwt.
Lean hog futures followed cattle markets higher on Friday after sinking to a two-week low in the prior session, although gains were held in check by expectations for rising supplies.
CME October lean hogs gained 0.975 cent to settle at 90.100 cents per pound.
(Reporting by Karl Plume; Editing by Shreya Biswas)
