On Monday, live cattle prices went up, hitting their highest level in more than two weeks since livestock markets rebounded.
Live cattle futures for June delivery increased by 1.37% to $158.75 per pound on March 27’s Asian afternoon session.
Chicago Mercantile Exchange (CME) cattle contracts rose to their highest prices last seen on March 10.
Last week, the commodity’s trade was at its heaviest on Wednesday, from $162.00 to $166.00, having an almost $163.00 bulk of the action. So far, front-month contracts improved by triple digits.
According to analysts, they have seen significant liquidation in virtually all outputs over two weeks. Moreover, they added that the cattle and hogs had joined in that significant purge.
June’s live cattle gap surged after its gap opened higher. It continued going up the whole session without having any obvious pullbacks. Also, it reached a high at $158.93 and settled at $158.88 under the high.
There is a solid end to the week for cash sales on Friday, along with a calm down on markets. This came after the banking system survived the weekends without facing any dilemmas.
Furthermore, as consumers are near grilling season, traders are looking forward to better cash prices in the future. The speculations are still present despite the seasonal tendencies for an uptick in live cattle.
Output Cut of Live Cattle Beef Helps Prices
Matching several months of anticipations, live cattle beef production will decrease in 2023. In the previous four weeks, its production was 6.40% lower than last year’s.
Lower output is the effect of a reduction in both live cattle slaughter and carcass weights.
Production is expected to plunge more aggressively for the rest of the year, having more supply pressures to hike prices. The estimates for 2023 had volumes lowering from 4.50% to 6.00% lower year-over-year.
However, its decrease will depend on whether drought will create additional herd liquidation. This would temporarily slow the decline of beef production, resulting in a weaker cut.