Chicago Mercantile Exchange (CME) live cattle futures rose on Monday for the sixth time in seven sessions, holding near contract highs posted last week on tight US cattle inventories and strong demand for beef, Reuters reported, citing analysts.
Cattle futures drew additional support from an equities market rebound on Monday after a Wall Street selloff at the end of last week. A stronger stock market tends to support demand for higher priced proteins like beef.
"That risk-off mindset from Friday was kind of a one-off. Cattle held up pretty good against that, but I think the stock market coming back around in force today probably helped with the short covering in cattle, extending that price recovery action," said Mike Zuzolo, president of Global Commodity Analytics.
News headlines from US meatpacker Tyson Foods also fuelled buying in cattle futures at times, he said.
Tyson executives said during an earnings conference call on Monday that US cattle supplies were still historically tight but that consumer demand for beef remained resilient despite high prices.
Ranchers this summer slashed the nation's cattle inventory to its lowest level since records began in 1973. A severe drought in recent years dried up pastures used for grazing, raising feeding costs, prompting ranchers to reduce their herds, and pushing beef prices to records.
The choice boxed beef cutout jumped $1.10 per hundredweight (cwt) on Monday to $364.32 per cwt, while the select cutout rose $1.09 to $341.59 per cwt, according to US Department of Agriculture data.
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