Live cattle futures extended their rally into Tuesday, closing $2.22 to $3.62 higher at the close, building on Monday's gains. According to TradingView News, the continued momentum demonstrates sustained buying interest in the cattle market following recent technical rebound. Cash trade has yet to develop this week with showlists being compiled early, indicating a pause in physical market activity.
Tight cattle supplies and improving packer margins underpinned the market, with beef packer margins improving to an estimated $66.65 per head on Wednesday, up from a negative $21.05 per head last week, according to livestock marketing advisory service HedgersEdge. As reported by Reuters, this improvement in processing economics provided support for the cattle market despite broader concerns about consumer demand.
CME December live cattle settled $3.000 higher at $219.200 per pound, while February futures closed $2.475 higher at $222.575 per pound. Feeder cattle futures posted gains of $2.000 to $4.45 across the board, with January contracts closing $2.500 higher at $326.675 per pound. According to TradingView News, the benchmark live cattle contract had touched its lowest level since December 2 on Friday before the recent rebound.
The rally comes as USDA estimated Federally inspected cattle slaughter for Tuesday at 111,000 head, with the weekly total at 218,000 head - up 7,000 head from the week prior but down 10,750 head from the same week last year. Wholesale Boxed Beef prices were mixed in Tuesday afternoon reports, with Choice boxes up 24 cents to $362.98 and Select boxes down $2.11 to $351.62. As reported by Reuters, worries about consumer demand for high-priced beef and stubbornly high inflation continue to influence market sentiment.
Lean hog futures finished mostly lower as short covering and bargain buying was countered by selling pressure tied to sluggish demand for pork. According to Reuters, CME December lean hog futures notched a 0.225-cent gain to settle at 56.025 cents per pound while nearly all deferred contracts ended lower on the day.
