Chicago | Reuters — Chicago Mercantile Exchange cattle and hog futures rose about one per cent on Wednesday, rallying after two straight sessions of losses on the back of gains in U.S. cash cattle and hog markets, traders and analysts said.
Most-active CME February live cattle settled 1.65 cents higher at 111.95 cents/lb. (all figures US$). The contract hit upside resistance near its 200-day moving average, and nearly tested its three-month peak of 112.525 notched on Friday and equaled on Monday, before prices reversed lower.
Cattle on a continuous chart gained 7.4 per cent during November, the commodity’s best monthly performance since October 2015.
Live cattle futures were trading about even with U.S. Plains cash steer and heifer markets. The weekly online Fed Cattle Exchange auction said 4,070 cattle traded $3-$4 per head higher than last week at a weighted average of $112.48/cwt.
“The cash market is still looking strong,” said Doug Houghton, analyst at Brock Capital Management, adding that investment funds also were likely injecting money into commodities amid gains of more than eight per cent in crude oil.
Beef and pork wholesale prices have been trending higher as retailers stock shelves for the Christmas and New Year’s holidays. Record-high equity indexes also stoked optimism of better demand for meat, with consumers generally more willing to buy pricey cuts such as steaks when they have better returns in stock markets.
Retailer meat buying for the holidays likely will be completed soon, however. Wholesale meat prices could give back some gains, portending losses in cattle and hog futures.
Wholesale beef edged higher and pork slightly lower, U.S. Department of Agriculture data showed at midday.
“The question is, when is the beef market going to hit the wall?” Houghton added.
CME February lean hogs finished 0.525 cent higher at 55.225 cents/lb., a gain of 0.8 per cent. Hogs on a continuous chart climbed 6.4 per cent for the month, their first monthly gain in five months.
Hog prices at midday were 0.46 cent higher at $43.84/cwt in the closely watched Iowa and southern Minnesota cash market, USDA said.
CME January feeder cattle were up 1.45 cents to 128.425 cents/lb., the highest in about two months. For the month, feeders were 5.4 per cent higher.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.