Chicago | Reuters — U.S. live cattle futures firmed on Wednesday in a short-covering and bargain-buying bounce following four straight losing sessions that had dragged prices to 2-1/2-week lows.
Lean hog futures also firmed on short covering and bargain buying, though livestock traders remained generally cautious as they monitor broadening coronavirus restrictions and pandemic relief negotiations in Washington.
Gains in both markets were tempered by sinking meat and cash livestock prices, and by concerns about domestic demand as rising U.S. coronavirus infections have forced closures of dine-in restaurants and food service outlets.
“We’ve got restaurants closing down for dining in… People don’t usually get takeout ribeyes or New York strips,” said Karl Setzer, commodity risk analyst with AgriVisor, referring to high-end beef cuts that rely on restaurant traffic.
“Cash cattle have been under pressure and that’s been putting the hammer down on futures. We have good export though, and our export market is making up for the loss that we would probably be seeing in futures from the domestic market,” he said.
Beef export sales through late November are 5.5 per cent ahead of the same time a year ago, while pork export sales are up 18.1 per cent, according to the U.S. Department of Agriculture (USDA).
The agency is due to release updated weekly export sales figures early on Thursday.
Actively traded Chicago Mercantile Exchange February live cattle futures ended 0.2 cent higher at 110.975 cents/lb. (all figures US$). January feeder cattle fell 0.55 cent to 137.025 cents/lb., while deferred contracts firmed.
Benchmark February lean hog futures settled 0.675 cent higher at 66.275 cents/lb.
The choice boxed beef cutout tumbled $6.76, to $218.26/cwt, on Wednesday, bringing month-to-date losses to more than $25, according to USDA. The composite pork carcass cutout shed 52 cents on Wednesday, to $77.60/cwt.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago.