LIVESTOCK-CME live cattle futures hit contract highs as cash markets surge

By Julie Ingwersen

CHICAGO, June 5 (Reuters) - Chicago Mercantile Exchange live cattle futures rose to life-of-contract highs on Thursday, bolstered by sharply higher trades in the cash cattle market, traders said.

CME August live cattle futures LCQ25 settled up 4.475 cents at 216.825 cents per pound after setting a contract high at 216.950 cents. CME August feeder cattle FCQ25 ended up 5.275 cents at 309.150 cents per pound after posting a contract high at 309.475 cents.

Slaughter-ready cattle traded in Kansas and Texas cash markets as high as $230 per hundredweight (CWT), traders said, up about $7 to $8 from last week.

Meat packers have been willing to pay high prices for cattle to keep their beef facilities operating despite the fact that profit margins have been in the red for months, brokers said.

"Even with poor profit margins, packers still need to produce a product. They are having to source animals in order to keep operating. And that's what drives the cash market," said Ted Seifried, vice president of Zaner Group.

"And for the moment, the consumer is buying. High-priced beef isn't slowing that down," Seifried said.

The U.S. Department of Agriculture priced choice cuts of boxed beef at $366.85 per cwt on Thursday afternoon, up $1.69 from Wednesday and the highest level in five years. Select cuts were down 11 cents at $356.61.

Lean hog futures closed mixed, with the most-active July contract LHN25 ending down 0.225 cent at 104.800 cents.

The USDA reported the pork carcass cutout on Thursday afternoon at $108.12 per cwt, up $1.50 from Wednesday.