CHICAGO, (Reuters) – Chicago Mercantile Exchange live cattle futures reached a contract high on Thursday amid hopes that Chinese importers will buy more U.S. beef after rival supplier Brazil suspended shipments to China, analysts said.
Brazil said it would halt beef exports to China, the main destination for its overseas shipments, after confirming a case of BSE.
Brazilian Agriculture Minister Carlos Favaro vowed to treat the case with the utmost transparency, adding he hopes the suspension can be lifted next month. In 2021, Brazil suspended exports to China for more than three months after finding two cases of the disease.
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“Using history as a guide, the U.S. is going to be looking at extra beef exports to China for the next three months and potentially longer if more cases pop up,” said Jim Gerlach, president of broker A/C Trading in Indiana.
The United States does not plan to restrict imports of Brazilian beef, the U.S. Department of Agriculture said in an email.
Thinly traded February live cattle futures settled up 0.250 cent at 165.150 cents per pound after reaching 165.650 cents, the highest on a continuous chart of the front contract since January 2015.
Most-active April live cattle finished up 0.250 cent at 165.325 cents per pound and set a contract high of 166.100 cents.
A reduction in the U.S. cattle herd has already boosted futures, as ranchers have grappled with drought. The USDA, at its annual Agricultural Outlook Forum, projected the five-area steer price in 2023 will average a record US$159.00 per cwt, about US$15 per cwt above 2022’s average price.
CME March feeder cattle futures settled up 1.250 cents at 189.225 cents per pound and reached its highest price since September 2022, supported by weak corn futures that signaled cheaper feed costs.
