CME feeder cattle futures spike on news of screwworm outbreak in Mexican cattle
By Heather Schlitz
CHICAGO, Nov 25 (Reuters) -Chicago Mercantile Exchange feeder cattle futures shot to their highest point since July on Monday as a screwworm outbreak in Mexican cattle shut down feeder cattle exports from Mexico to the U.S. and propelled futures higher, analysts said.
Live cattle prices also spiked before later retreating, while hog futures set new contract highs on strong demand and a lower-than-expected number of slaughter-ready hogs.
"It was another crazy day in livestock," Dennis Smith, broker with Archer Financial Services, said. "When futures opened, we knew the border was closed and no Mexican cattle could be shipped in."
The U.S. Department of Agriculture on Friday said that Mexico's chief veterinary officer had notified it of the detection of New World screwworm in a cow at a checkpoint near the southern border with Guatemala.
Screwworm maggots often enter through an open wound and feed on living flesh of warm-blooded animals, including people, the USDA said.
CME January feeder cattle FCF25 settled up 1.175 cents at 255.475 cents per pound. February live cattle LCG25 futures closed down 0.500 cent at 187.700 cents per pound.
CME lean hog futures advanced for a fourth day on Monday, with most-active February futures LHG25 up 0.250 cent at 85.925 cents per pound.
Though live cattle futures increased sharply to start the session, they backed off highs as traders viewed them as overbought, Smith said.
The US-Mexico border is likely to stay closed only for a few weeks, meaning any boost futures receive will be temporary.
Strong beef and pork demand has also supported futures, traders said.
Wholesale choice boxed beef gained $2.30 to $309.71 per hundredweight on Monday, according to the USDA. Select boxed beef gained $1.67 to $273.74 per cwt.
Wholesale pork carcasses gained $1.56 at $93.33 per cwt.
Strong pork exports and steady domestic demand, driven by pork's cheap price relative to beef, has kept cutout values strong, traders said.
Reporting by Heather Schlitz; Editing by Mohammed Safi Shamsi
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