CHICAGO, March 12 (Reuters) – Chicago Mercantile Exchange live cattle futures rose on Thursday as improving packer margins and rising beef prices more than offset concerns about rising crude oil prices and broader economic uncertainty that could dent demand for beef.
Feeder cattle were flat to higher as spillover support from rising live cattle futures was countered by pressure from higher feed corn costs.
CME April live cattle settled up 1.100 cents to close at 231.250 cents per pound after testing technical chart support at its 200-day moving average and hitting overhead resistance at its 100-day moving average.
April feeders ended down 0.300 cent at 343.000 cents per pound, while deferred-month contracts notched modest gains.
Beef packers have grappled with poor margins for months and some have slowed production as tight cattle supplies pushed up costs. Beef prices are now rising due to the slowdown in beef output and packer margins have turned positive.
The average packer margin rose to $20 per head on Thursday after losses of more than $300 per head just two weeks ago, according to livestock marketing advisory service HedgersEdge.
The choice boxed beef cutout value rose 39 cents on Thursday to $397.09 per hundredweight, a six-month high, according to the U.S. Department of Agriculture. Select cuts were up $1.57 at $390.82 per cwt, the highest since the Covid supply-chain disruptions of 2020.
Economic uncertainty, however, continued to overhang the cattle market.
“We probably have factored in the general concern regarding packer production cuts … We still have the concern regarding general economic strength in these coming weeks with this 30 to 40 cent rise in fuel costs,” said Rich Nelson, chief strategist with Allendale Inc.
CME lean hog futures eased on Thursday but remained in a tight recent trading range. April futures settled down 0.850 cent at 94.350 cents per pound. (Reporting by Karl Plume; Editing by Alan Barona)
