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LIVESTOCK-Cattle futures up as beef prices climb, Wall Street hits record

By Julie Ingwersen

CHICAGO, Nov 24 (Reuters) - U.S. cattle futures closed higher on Tuesday for a third straight session, lifted by surging wholesale beef prices and optimism that coronavirus vaccines could trigger an economic recovery, bolstering demand for meat, traders said.

Wall Street's Dow Jones industrial average hit a record high above 30,000 on upbeat COVID-19 vaccine news, including likely shots for some first responders in a matter of weeks.

"That spilled over and helped the cattle complex," said Jeff French, an analyst with Top Third Ag Marketing.

Chicago Mercantile Exchange February live cattle futures settled up 1.050 cents at 113.950 cents per pound.

CME January feeder cattle ended up 0.775 cent at 138.600 cents per pound.

Live cattle futures have bounced back this week after a sell-off last week that traders attributed in part to rising coronavirus infections across the country that threatened to shutter more restaurants and food service businesses.

"These closures are not friendly to demand," French said.

Yet even as COVID-19 cases spread, wholesale beef prices have been climbing since late October. Choice cuts were up $2.70 on Tuesday afternoon at $244.30 per cwt, the highest since June. Select cuts were up $2.23 at $219.71, according to USDA data.

The beef rally has buoyed profit margins for meat packers, raising expectations that they might pay $1 to $2 per cwt more for market-ready cattle in the cash market this week compared to last week.

"Packers are making good money; the last thing they want to do is slow the kill chain. So these margins should spill over into higher cash prices," French said.

CME lean hog futures closed narrowly mixed, with the most-active February contract ending down 0.375 cent at 66.750 cents per pound, pausing after a two-session advance.

Funds hold a sizable net long position in CME lean hog futures, leaving the market vulnerable to bouts of long liquidation, French said. (Reporting by Julie Ingwersen; Editing by Lincoln Feast.)

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