Chicago | Reuters — Short-covering lifted Chicago Mercantile Exchange live cattle and feeder futures on Tuesday, analysts said, extending a recovery from springtime lows reached last week.
The markets were due to rise after recent fund liquidation and technical selling left the market oversold, analysts said.
“The main thing is some short-covering here,” said Austin Schroeder, analyst for Brugler Marketing & Management.
CME December live cattle LCZ3 futures settled up 0.925 cent at 175.850 cents per pound, while February 2024 live cattle LCG24 jumped 1.625 cents to 176.875 cents per pound. The contracts on Friday touched their lowest prices since May.
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January 2024 feeder cattle futures FCF24 rose 0.700 cent to 229.00 cents per pound, after sinking on Friday to the lowest price since April 5.
Traders are waiting for the U.S. Department of Agriculture (USDA) to issue a monthly Cattle on Feed report on Friday. The markets have already priced in expectations for bearish data, an analyst said, after the USDA last month reported larger-than-expected September placements of cattle into U.S. feedlots.
Traders are monitoring supplies after years of drought drove ranchers to reduce the U.S. herd.
A shortage of cattle for slaughtering will remain a challenge in the U.S. in the fourth quarter and in 2024, said Wesley Batista Filho, director for Brazilian meatpacker JBS SA JBSS3.SA.
The U.S. hog market, meanwhile, traded sideways on Tuesday.
CME December lean hog futures LHZ3 settled 1.050 cents lower at 72.300 cents per pound and remained within Monday’s trading range.
–Reporting for Reuters by Tom Polansek.
