On Monday, Chicago Mercantile Exchange (CME) announced that cattle futures increased amid bargain buying after recent price slumps.
Live cattle futures for February delivery went up by 0.24% to 157.85 cents per pound on January 24’s Asian afternoon session. Likewise, feeder cattle contracts for March delivery improved by 1.38% to 183.47 cents per pound.
Feeder futures and live cattle were able to maintain Monday’s price hike. However, higher feed prices pressure the beef market and question consumer and export demands.
Furthermore, a boost in cattle contracts was caused by a sharp plunge in grain harvests amid technical selling. It was also due to well-timed rains in Argentina’s livestock farm belts.
According to the United States Department of Agriculture (USDA), cattle slaughter rate was as well as wholesale beef values. In contrast, bovine packing margins were up.
Also, traders stated that they anticipate cattle prices to be steady and go higher this week. However, the USDA said on Monday that the feeder steers, heifers, and calves were bound to go lower at auctions.
Choice cuts, which the USDA priced, plummeted by 61.00 cents to $271.11 per hundredweight. On the other hand, select cuts were down by 57.00 cents to $255.86 per cwt.
US Dollar Weakens ahead of the Fed Meeting
Adding to a bullish cattle price is a weak greenback movement. The US dollar index went down by 0.05% to 101.86 on January 25’s early Asian session.
On Wednesday, the American currency hit an almost nine-month low as traders worries about the potential risks of recession. It is attributed to a less aggressive Federal Reserve.
Market participants expect a 25-basis point interest rate increase at the central bank’s upcoming monetary policy meeting on January 31.
On Friday, Fed Governor Waller said he funds a quarter percentage point. He would only deal with a mild recession if it would bring inflation down.
