Chicago Mercantile Exchange (CME) live cattle futures shot up for a fifth straight trading day on Tuesday, with feeder cattle futures also turning higher, from strength in the cash market, Reuters reported, citing analysts.
The most-active CME April live cattle contract ended up 3.450 cents at 207.275 cents per pound. All other live cattle contracts also reached fresh lifetime highs.
CME March feeder cattle settled up 3 cents at 278.250 cents per pound, with several other contracts reaching lifetime highs.
A strong cash cattle trade was driving the ongoing rally in cattle futures, according to Matthew Wiegand of FuturesOne.
Packers continue to struggle to find cattle inventory for slaughter operations, with beef demand from consumers continuing to be strong, he said.
Packers are still willing to pay high prices for cattle, Wiegand said, with tight US cattle supplies expected to remain that way in the near future.
The lack of cattle imports from Mexico after the US blocked shipments in November over the discovery of the New World screwworm pest in Mexico only exacerbated the problem, Wiegand said.
Beef packer margins were deep in the red on Tuesday, with losses of $112.55 per head of cattle, compared with losses of $118.40 on Monday and losses of $46.75 a week ago, according to livestock marketing advisory service HedgersEdge.com.
Wholesale beef prices also rose on Tuesday, giving an additional boost to cattle futures.
Choice cuts of boxed beef rose $2.37 to $332.45 per hundredweight (cwt) on Tuesday afternoon, according to the US Department of Agriculture (USDA).
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