CME Cattle Futures Rise Amid Supply Problems

CHICAGO, Dec.29 (Reuters) – Chicago Mercantile Exchange cattle futures soared on Wednesday, as spot cattle prices firmed amid concerns over the supply of meat to meet demand slated for next year, traders said.

Cattle futures ended higher, as prices for beef carcass cuts continued to strengthen and spot cattle traded higher, traders said.

Cash cattle traded between $ 138 and $ 140 in the Nebraska market on Tuesday, up from $ 135 last week, said Rich Nelson, chief strategist at commodity brokerage firm Allendale.

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“It looks like the three week decline in cash livestock is now over, and the market is responding to it,” Nelson said.

Wholesale canned beef prices have risen, with choice falling from $ 1.21 to $ 265.87 per cwt on Wednesday afternoon, according to data from the United States Department of Agriculture (USDA). Some cuts have increased, to $ 257.20 per cwt.

February CME live cattle futures were up 1.325 cents to 140.725 cents per pound. CME March feeder cattle ended the session up 2.825 cents to 168.050 cents.

US pork futures rose as wholesale prices fell. Prices for pork carcass cuts in the United States fell from $ 2.60 to $ 84.29 per cwt (cwt) on Wednesday, the USDA said. Prices for ham increased from $ 5.50 to $ 65.76.

The most active February pork futures settled the day up 1,200 cents to 83.825 cents per pound. April hogs gained 0.90 cents to 88.450 cents a pound.

Meanwhile, livestock traders have said uncertainty over California’s Proposition 12, which imposes new standards for animal housing, could create volatility in the pork market in the coming weeks.

Among other things, the law requires farmers to give sows a 24-foot space in barns and prohibits California companies from knowingly selling uncooked pork from animals housed in ways that do not meet that requirement.

The changes are expected to take effect on January 1. The measure is being challenged in court.

A key question, traders said, is pricing: how will pork prices change in California, and whether the law will affect how wholesale pork cut and spot pork prices are calculated.

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Reporting by PJ Huffstutter in Chicago; Editing by Shinjini Ganguli

Our Standards: Thomson Reuters Trust Principles.

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