Beef prices rally, pushing live cattle to seven-week high – CME

Surging US beef prices lifted Chicago Mercantile Exchange (CME) live cattle futures to a seven-week high on Thursday while feeder cattle touched a two-week peak, Reuters reported, citing traders.

Wholesale beef prices have jumped this week as retailers and meat processors look ahead to the Memorial Day weekend at the end of the month. The holiday is considered the start of the peak grilling season for products like steaks and hamburgers.

The choice boxed beef cutout value climbed $3.38 to $310.15 per cwt, after surging more than $12 over the previous three days, according to US Department of Agriculture (USDA) data. Select cuts rose $2.20 to $296.51 per cwt, after gaining more than $10 over the prior three days.

Reduced processing of cattle by meatpackers helped support higher prices, traders said.

CME June live cattle settled up 0.85 cent at 179.025 cents per pound after hitting the highest level since April 1 at 179.8 cents. CME August feeder cattle closed 1.475 cents higher at 257.35 cents per pound and set the highest price since April 30 at 258.7 cents.

Meatpackers have slaughtered about 487,000 cattle so far this week, down from 489,000 cattle at the same time a week ago and 501,669 cattle a year earlier, according to USDA data.

Cattle supplies are tight after ranchers slashed the US herd to decades lows, and meatpackers are losing money processing the limited supply into beef. Packers were losing an estimated $19.45 per head on Thursday, compared to losses of more than $90 per head a week earlier, according to HedgersEdge.com.

Heavier cattle are helping to offset the small herd, analysts said. Steers reached an average weight of 923 pounds in the week ended May 4, up three pounds from the previous week, USDA data showed.

The USDA separately said no bird flu virus was found after cooking ground beef to medium to well done as part of an experiment conducted to confirm the safety of meat to address concerns over an outbreak of the disease in dairy cattle.

In CME’s lean hog market, June futures ended up 0.875 cent at 98.375 cents per pound.