Chicago | Reuters — U.S. cattle futures firmed on Wednesday, shrugging off weakness in the cash market in anticipation of tightening supplies in the coming months, traders said.
Hog futures eased on a round of technical selling.
Traders were expecting a U.S. Department of Agriculture (USDA) report on Friday to show an 8.6 per cent decline in cattle placements during November. That outlook lent support to prices as traders staked out positions.
“The cattle market is telling you that we are at a low right now in the cash market and it is very unlikely to keep going lower,” said Dennis Smith, broker at Archer Financial Services. “I just think the market is anticipating a much better fundamental situation three months from now than what we are currently looking at.”
Chicago Mercantile Exchange (CME) February live cattle futures firmed 0.9 cent to 113.775 cents/lb. (all figures US$). The contract closed above its session lows after finding support at its 20-day moving average.
January feeder cattle rose 0.725 cent, to 140.825 cents/lb.
The choice boxed beef cutout fell $1.60, to $207.20/cwt, on Wednesday morning, its lowest since Oct. 29, according to USDA. Select cuts dropped 11 cents, to $192.09 per cwt.
CME February lean hogs fell 0.475 cent to settle at 65.975 cents/lb., facing technical resistance at its 20-day, 30-day and 40-day moving averages.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.