Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange eased on Tuesday, pressured by a steady supply of market-ready cattle that may indicate a seasonal high in the market.
“Five weeks in a row of generally steady trade for cash cattle is reminding the trade that we may already be at the spring high,” said Rich Nelson, chief strategist at Allendale Inc.
Cash cattle traded mostly steady at $138/cwt, according to the U.S. Department of Agriculture, with some $140 trade in Nebraska (all figures US$).
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The most-active June live cattle contract lost 1.6 cents to 133.325 cents/lb. May feeder cattle ended 3.475 cents to 159 cents/lb., weighed down by rising corn futures.
Packers processed 125,000 head of cattle, 5,000 more than the same period a year earlier.
Boxed beef prices climbed, with choice cuts adding $3.49, to $271.53/cwt, while select cuts gained $1.20, to $262.90.
Meanwhile, CME lean hog futures fell for a sixth consecutive session, pressured by fears of ripple effects in the wholesale meat market as international trade partners threaten to ban U.S. poultry imports.
More than 22 million commercially raised U.S. chickens and turkeys have been culled since February due to outbreaks of a highly lethal type of bird flu, USDA data showed.
A reduction of poultry exports would overshadow that reduction in birds, creating greater domestic poultry supply and competing with pork sales, Nelson said.
“The argument is that a five per cent cut for U.S. chicken exports, or a 10 per cent cut, completely offsets any decline in bird production,” Nelson added.
CME benchmark June lean hogs fell for a sixth consecutive session, dropping 1.8 cents to 114.35 cents/lb. The June contract fell below its 50-day moving average.
Daily hog slaughter of 480,000 head was slightly above week-ago and year-over-year volumes.
The CME’s Lean Hog Index, a two-day weighted average of cash hog prices, fell 22 cents, to 102.41 cents/lb.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
