U.S. livestock: CME live cattle post losses, but off session lows

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures on Tuesday settled lower, weighed down by profit-taking and initial fund liquidation, said traders.

Rising wholesale beef values and CME live cattle futures’ discount to prices for slaughter-ready or cash cattle lifted contracts from session bottoms.

February live cattle finished 0.875 cents/lb. lower at 124.825 cents (all figures US$). April ended down 0.825 cent at 124.175 cents.

Some investors sold live cattle contracts, rattled by the U.S. stock market plunge as oil prices slumped and global borrowing costs cooled.

Other CME live cattle market participants were put off by Tuesday’s $125-$126/cwt cash prices in the U.S. Plains, compared to mostly $127 last week.

And a few traders continued to digest Friday’s U.S. government monthly cattle report that showed increased cattle supplies ahead.

Psychology tied to the stock market fall may have had some influence on cattle futures, “but there’s no question that we have a lot of cattle out there waiting to come to market,” said Oak Investment Group president Joe Ocrant.

Packers bought cattle earlier in the week than usual, which suggests they may be short of supplies, a feedlot source said. But processors were hesitant to raise cash bids given their thinner margins, he said.

Investors awaited the U.S. Department of Agriculture’s bi-annual cattle inventory report on Wednesday at 2 p.m. CT.

CME feeder cattle finished modestly higher following firmer deep-deferred live cattle futures and strong cash feeder cattle prices.

March feeders ended up 0.175 cents at 147.175 cents.

Mostly weaker hog futures

Most CME lean hog contracts were weakened by early-session technical selling, said traders.

They said nearby futures losses were limited by their close proximity to CME’s hog index for Jan. 26 at 73.83 cents.

February lean hog futures were up 0.05 cent at 72.45 cents/lb. Most-active April hogs were 0.525 cent lower at 72.9, and May closed 0.425 cent lower at 78.25 cents.

Cash prices could consistently trend higher in the coming weeks with packers competing for supplies to keep pace with their impressive margins, a trader said.

Demand for pork loins should pick up spurred by the approaching spring grilling, and grocers will soon start booking hams for the Easter holiday, he said.

— Reporting for Reuters by Theopolis Waters in Chicago.

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