CME cattle futures rose on Monday with June live cattle futures up 1.725 cents to 201.075 cents per pound and April feeder cattle futures rising by 3 cents to 284.2 cents per pound, driven by expectations of increased demand from China after a new economic stimulus was announced. The renewal of registrations for U.S. meat exports also bolstered market optimism.

On Monday, cattle and hog futures on the Chicago Mercantile Exchange demonstrated an increase due to anticipated stronger demand from China following the announcement of a new economic stimulus plan. The June live cattle futures settled at 201.075 cents per pound, reflecting an increase of 1.725 cents. Similarly, April feeder cattle futures rose by 3 cents to close at 284.2 cents per pound.

Investors are hopeful that the world’s largest meat importer will increase its demand after China’s State Council introduced a “special action plan” aimed at enhancing domestic consumption. This plan includes initiatives such as boosting income for residents and implementing a childcare subsidy scheme.

China’s consumer demand has been adversely affected by recent setbacks, including COVID-19 disruptions and a sustained property slump. Analysts, including Karl Setzer of Consus Ag Consulting, note that expectations for recovery are supported by this recent governmental focus on stimulating economic activity.

In a related development, China renewed its registrations for U.S. pork and poultry facilities, which will allow more exports. This decision comes after expiring registrations posed potential threats to shipments. Both the U.S. Meat Export Federation and the USA Poultry and Egg Export Council confirmed the renewal was valid for five years.

The CME’s April lean hog contract increased by 1.45 cents, settling at 88.075 cents per pound. Furthermore, Canadian imports have resumed from the major U.S. pork-processing facility in Tar Heel, North Carolina, following a brief suspension of shipments.

In terms of wholesale values, USDA choice boxed beef saw a rise of $2.89, achieving $321.16 per hundredweight, while the select category increased by $1.58 to $307.90 per hundredweight. Pork carcass prices also rose, with an increase of $0.27 to $97.65 per hundredweight, and bellies increased by $1.72 to $142.80 per hundredweight.

The increase in CME cattle and hog futures reflects the positive market response to China’s new economic stimulus, aimed at enhancing domestic consumption. With renewed registrations for U.S. meat exports and a rebound in wholesale values, there are optimistic signs for the meat industry as consumer demand may stabilize in China. The recent developments indicate a potentially significant upward trend for U.S. livestock exports.

Original Source: www.tradingview.com

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