U.S. live cattle futures rise with cash sentiment

U.S. live cattle futures turned higher on Wednesday as cash cattle price sentiment strengthened with wholesale beef prices, analysts and traders said.

Chicago Mercantile Exchange live cattle traders expect cash cattle to trade steady to higher compared with last week’s at $126 to $127, due in part to fewer cattle being put up for sale (all figures US$).

Slaughter-ready cattle may be less available as colder weather settles into the U.S. Plains and slows weight gains in animals.

"The expectations that we may see higher cash sales is supporting the market, but it is in very light trade," said Allendale Inc. broker Steve Georgy.

The price for wholesale choice beef Wednesday morning was $194.67 per hundredweight, $1.58 higher than Friday, according to the U.S. Department of Agriculture.

Price comparisons were made to Friday’s data because government offices were closed on Monday in observance of the Christmas holiday.

Grocers are gearing up to feature certain cuts of beef early next year, hoping to appeal to shoppers focused on paying off post-Christmas credit card debt, a trader said.

Another encouraging sign for the CME live cattle market was USDA’s comprehensive weekly beef export data. It showed sales for last week at 21,246 tonnes versus 19,087 tonnes the week before and 12,084 tonnes a year ago.

CME live cattle spot December closed up 0.175 cent per pound at 129.35 cents. Most-actively traded February ended at 133.775 cents, 0.55 cent higher.

Feeder cattle futures moved up with the higher live cattle market, and on lower corn prices which eased feed input costs.

January closed 0.575 cent/lb. higher at 152.075 cents. March was up 0.6 cent to 154.875 cents.

Hogs wilt on profit-taking

CME hogs weakened as traders took profits, offsetting initial gains driven by wintry weather across the eastern Midwest that lifted hog prices in the region.

The storm moving through the eastern Corn Belt deteriorated road conditions and created problems transporting livestock, said Allendale’s Georgy.

USDA data Wednesday morning showed hog prices in the eastern Midwest direct market up $1.50/cwt from Friday to $78.72, said USDA.

While some packers may be hard pressed to book hogs in the storm’s wake, others have covered their supply needs into next week’s New Year’s holiday-shortened work week.

Traders also exercised caution before USDA’s quarterly hogs report on Friday.

Analysts expect the data to show only a modest decline in the nation’s hog herd after historic drought drove feed costs to record highs last summer.

Deep-deferred months led declines in futures due to spreads, with the view that producers may not aggressively cull their herds if corn prices continue to decline.

CME hogs for February settled down 0.1 cent/lb. at 87.45 cents. April ended at 91.475 cents, off 0.175 cent.

— Theopolis Waters writes for Reuters from Chicago.

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