The Chicago Board of Trade (CBOT) will be closed on Thursday for the U.S. Thanksgiving holiday.

Reductions in beef cold storage supplies last month should be supportive after the Thanksgiving holiday, said Altin Kalo, economist at Steiner Consulting Group.

“There’s more beef out there, but the drawdown in inventory was quite substantial in October,” he said.

Boxed beef values were mixed on Wednesday, with choice cuts falling $3.22, to $253.41/cwt, while select cuts gained 33 cents, to $234.51, the U.S. Department of Agriculture said (all figures US$).

Most-active CME February live cattle futures eased one cent, to 155.425 cents/lb. Nearby December live cattle fell 0.45 cent to finish at 153.35 cents/lb.

CME January feeder cattle lost 2.425 cents to 179.25 cents/lb.

CME lean hog futures also eased on Wednesday, though Kalo noted underlying support in hogs as well.

“The thing that sticks out the most to me is what’s going on with hog carcass weights. Usually you see those moving higher this time of year, and they’re not. that tells you the producer is pretty current.”

The most-active February lean hogs contract settled 1.275 cents lower at 88.8 cents/lb.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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“With a short week, you won’t have to have as aggressive a cash trade to fill out the packer needs for the week. So that takes the spark away from hogs and cattle,” said Matt Wiegand, risk management consultant at FuturesOne.

Most-active CME February live cattle futures eased 0.3 cent to 156.425 cents/lb. after reaching 156.875 cents (all figures US$). Nearby December live cattle added 0.25 cent to finish at 153.8 cents/lb.

CME January feeder cattle lost 0.95 cents to 181.675 cents/lb.

Boxed beef values firmed, with choice cuts adding $1.06, to $256.63/cwt, while select cuts gained 95 cents, to $234.18, the U.S. Department of Agriculture said.

U.S. frozen beef stocks in cold storage through October 31 fell three per cent from September to 509.949 million lbs., USDA said in a report released after the markets closed. Frozen beef is up eight per cent from the same month a year earlier.

CME lean hog futures also trimmed on Tuesday, lacking direction ahead of USDA’s cold storage report that showed lower month-over-month supplies but a sizeable increase compared to 2021.

U.S. frozen pork belly stocks of 40.196 million lbs. as of October 31 were up 246 per cent from last year, USDA said.

“Bellies are much more plentiful, which should keep the cutout from getting too carried away,” Wiegand said.

The most-active February lean hogs contract settled down 0.075 cent at 90.075 cents/lb.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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CME April lean hog futures rose 2.3 cents to end at 102.55 cents/lb. (all figures US$). Most-active June hogs gained 2.9 cents to finish at 122.975 cents/lb. The June contract closed above the high end of its 20-day Bollinger range for the first time since Feb. 22.

CME’s most-active June live cattle gained 0.275 cent, to 135.975 cents/lb. The contract rose above its 20-day moving average.

May feeder cattle futures rose 0.375 cent, to 165.8 cents/lb.

The U.S. Agriculture Department said after the markets closed that pork belly stocks in cold storage totaled 50.139 million lbs. as of Feb. 28, up from 37.556 million lbs. a year earlier.

Beef stocks in cold storage rose to 532.502 million lbs. from 512.528 million at the end of February 2021.

Choice cuts of boxed beef rose by $1.39, to $261.36/cwt, by Wednesday morning, according to USDA data. Select cuts gained $1.20, to $253.09/cwt.

— Reporting for Reuters by Mark Weinraub in Chicago.

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Nearly a year later, the industry is in the middle of a speedy recovery.

At the Chicago Mercantile Exchange (CME) on Thursday, lean hog futures were either approaching or have surpassed the US$100/cwt mark, levels which haven’t been seen since October 2014.

Brad Marceniuk, a Saskatoon-based livestock economist for the government of Saskatchewan, said there are major drivers right now behind the rise in hog prices.

“Domestic markets typically get stronger into spring and summer with barbecue season increasing demand. We have also had reduced U.S. hog slaughter numbers overall the last few weeks which has reduced pork supply,” he said via email.

“Last spring, the pandemic forced many U.S. hog slaughter plants to slow down, some temporarily closing, which reduced weekly pork supplies for many weeks, reducing U.S. pork in cold storage. Previous pork in cold storage levels have not regained to pre-pandemic levels.”

One of the major drivers is China, as it continues to rebuild its hog herd decimated by African swine fever. Last winter, there were reports China was steadily growing its herd and reducing its overseas hog purchases. Now, they are starting back up again.

“Over the last few weeks there have been reports that China is again struggling to deal with African swine fever and have been forced to kill millions of pigs. This news has likely helped the lean hogs futures contracts to move higher in anticipation of higher pork exports,” Marceniuk said.

Canadian and U.S. hog markets are thriving and, despite rising feed prices taking a bite out of profits, slaughter-weight hog prices are now 60 per cent higher than the low levels seen last July, according to Marceniuk.

“I expect hog prices over the next few months to continue to be strong. We’re at the time of year where seasonal demand is stronger…If (China’s) demand picks up again, we could see a bump up in prices higher,” he added.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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The U.S. Agriculture Department’s cold storage report issued on Tuesday afternoon fueled buying on Wednesday.

“Belly and trim stocks are at four-year lows, providing support for lean hog futures, along with more reports of hog losses due to disease in China raising hopes for export business,” StoneX chief commodities economist Arlan Suderman said in a research note to clients.

Chicago Mercantile Exchange April lean hog futures rose three cents to 89.425 cents/lb. (all figures US$). The front-month contract hit its highest since May 24, 2019.

Cattle futures also were firm, with bargain buying noted after the most-active live cattle April contract hit its lowest in a month.

CME April live cattle futures rose 1.025 cents to close at 122.225 cents/lb., rising above its 30-day moving average. Resistance was noted at the contract’s 20-day moving average.

CME April feeder cattle rose 2.15 cents to 144.75 cents/lb.

— Mark Weinraub is a Reuters commodities correspondent in Chicago.

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Chicago Mercantile Exchange April live cattle futures settled up 0.425 cent at 122.95 cents/lb. (all figures US$).

Boxed beef cutout values continue to strengthen, with choice cuts up $3.91 at $226.73/cwt on Monday afternoon and select cuts up $2.87 at $216.21, according to the U.S. Department of Agriculture (USDA).

Packer margins for cattle are hovering around $300 per head, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC, fueling expectations of strong cash trade this week after market-ready cattle traded at around $109-$110/cwt last week.

“The packer continues to make good margins and beef continues to move aggressively,” said Don Roose, president of Iowa-based U.S. Commodities.

USDA late on Friday reported U.S. cattle feedlot placements for December at 101 per cent of a year ago, above an average of analyst expectations for 97 per cent.

The larger-than-expected figure pressured cattle futures in early moves, but traders soon shifted their focus to rising beef prices.

USDA’s Cattle on Feed report “pushed us down early. But it’s a look backwards, almost a month old, so we didn’t pay as much attention to it,” Roose said.

However, CME March feeder cattle futures ended modestly lower on Monday, finishing down 0.3 cent at 143.85 cents/lb. as corn futures rallied, signaling higher feed costs.

CME lean hog futures edged higher, with the benchmark April contract settling up 0.475 cent at 76.625 cents/lb. The spot February contract rose 0.7 cent, to 70.625 cents/lb.

A winter storm crossing the Midwest on Monday lent support, threatening to slow the movement of animals.

After Monday’s close, USDA’s monthly cold storage report showed U.S. Dec. 31 frozen beef stocks at 534.297 million pounds, up 11 per cent from a year ago, and frozen pork belly stocks at 30.715 million pounds, down 54 per cent from this time last year.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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Chicago Mercantile Exchange December live cattle futures settled 0.5 cent higher at 107.875 cents/lb. (all figures US$).

Market-ready cattle traded in the cash market at $107/cwt, up $1 from the bulk of last week’s trade, the U.S. Department of Agriculture said.

CME feeder cattle futures gained 1.975 cents to end at 135.15 cents/lb., after reaching 135.475, the highest since Oct. 8.

“China has been buying more beef recently, on the weekly sales export reports. We assume a big chunk of that is going to get shipped before the Lunar New Year. That’s fourth quarter business,” said Alan Brugler, president of Brugler Marketing.

Back-month contracts rose as strength in U.S. stock markets fueled hopes about consumer demand for high-priced cuts of beef.

“It might be a little optimism about economic growth in 2021, and maybe that would translate to more beef demand, grilling demand for next summer,” said Brugler.

Wholesale beef prices continued to strengthen, with choice cuts up 75 cents at $210.19/cwt on Wednesday afternoon and select cuts up $1.60 at $197.05, according to USDA data.

Week-to-date cattle slaughter rates are ahead of pace, compared to last week and same time last year, with 359,000 cattle processed.

Lean hog futures also gained, with the most-active December contract ending 0.95 cent higher at 66.35 cents/lb.

Hog futures were supported by several months of lower cold storage stocks that are able to handle higher slaughter, despite a seasonal uptick in hogs.

“Everything we add to production is being absorbed, either by export or domestic consumption,” said Brugler.

Weekly hog slaughter is on pace with year ago levels, at 1.475 million slaughtered, up from last week.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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The USDA stocks report, released after the close on Monday, showed a record-large drop in U.S. frozen pork inventories in May and a steep drop in frozen beef supplies.

Frozen inventories plunged last month as outbreaks of the new coronavirus among meatpacking workers slowed production and exporters drew from supplies in storage.

Chicago Mercantile Exchange (CME) July lean hogs gained 0.075 cent to 46.9 cents/lb., while actively traded August jumped 1.4 cents, to 52.5 cents/lb. (all figures US$).

CME August live cattle rose 2.075 cents to 97.2 cents/lb. and August feeder cattle jumped 1.45 cents to 133.2 cents/lb.

“This is certainly a cold storage report reaction. Pork numbers were a record for any previous month and the beef numbers were the second largest decline of any previous month,” said Rich Nelson, chief strategist with Allendale Inc.

Ample supplies of livestock following coronavirus-related supply-chain disruptions continue to hang over the market.

Hog traders are looking ahead to a quarterly USDA report on Thursday that is expected to show a 3.7 per cent expansion of the U.S. hog herd in the March-to-May quarter.

Traders are also monitoring U.S. trade with China after White House trade adviser Peter Navarro on Monday walked back on his earlier remarks that the U.S.-China trade pact was “over,” stoking volatility in markets already rattled by the coronavirus pandemic.

Markets are also wary about requests by Chinese authorities to certify food import shipments to be free of coronavirus contamination. Although there is no evidence that the virus can be transmitted from food to people, at least three Brazilian meat processors have signed such declarations.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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Lean hog futures also dropped, as backups continue at slaughter facilities, traders said.

The nearby CME live cattle futures contract lost 1.1 cents to close at 97.7 cents/lb., while August live cattle ended 0.9 cent lower at 97.325 cents/lb. (all figures US$).

Feeder cattle contracts also weakened, with the August contract slipping 0.075 cent to 128.8 cents/lb.

June lean hogs lost 0.575 cents to 58.775 cents/lb., while the July contract sank 1.275 cents to 55.9 cents/lb.

USDA showed a slight drop in cold storage meat supplies on Thursday, with beef dropping two per cent from April, but still 14 per cent higher than last year. Frozen pork was down just one per cent from last year.

“There was no big draw down in stocks, which was a little counter to what the trade was expecting,” said Rich Nelson, chief strategist at Allendale Inc.

In its monthly report, USDA said May 1 cattle on feed dropped to 95 per cent from a year ago, while April placements were 78 per cent, beating trade estimates of 77.4 per cent.

Nelson said Friday’s report showed the backup in cattle isn’t going away anytime soon.

“We’re going to hold that backlog in place, all the way to September, when these low supplies start to drop off,” said Nelson. “September through December, we’ll have some relatively low supplies of cattle being offered.”

USDA said on Friday the daily hog slaughter dipped to 380,000. The daily cattle slaughter trimmed to 102,000.

— Christopher Walljasper reports on ag commodities for Reuters from Chicago.

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CME live cattle futures firmed, while feeder cattle dipped ahead of Friday’s U.S. Department of Agriculture cattle on feed report.

The nearby CME June lean hogs gained 2.475 cents, to 59.35 cents/lb., while the July contract lifted 1.375 cents to 57.175 cents/lb. (all figures US$).

The June live cattle futures contract added 0.4 cent at 98.8 cents/lb., while August live cattle ended 0.6 cent higher at 98.225 cents/lb.

Feeder cattle contracts were weaker, with the August contract slipping 0.125 cent to 128.875 cents/lb.

USDA said on Thursday that the daily hog slaughter was 398,000, up slightly from Wednesday and the highest total since April 17. The daily cattle slaughter totaled 103,000, the highest since April 7.

“With the slaughter increases coming, demand for hogs is going to increase,” said Doug Houghton, technical analyst at Brock Capital Management. “It says to me the front-end contracts were probably a bit too far discount to cash, and there’s probably some profit taking on short positions.”

Slaughter numbers remain below pre-COVID-19 pandemic averages, as coronavirus outbreaks at slaughter facilities have led to plant closures, backing up hogs and cattle at the farm level.

USDA showed a slight drop in cold storage meat supplies on Thursday, with beef dropping two per cent from April, but still 14 per cent higher than last year. Frozen pork was down just one per cent from last year.

Pork shipments to China totaled 19,800 tonnes last week, with 12,600 tonnes of pork canceled and 400 tonnes of beef shipped, according to the USDA.

— Reporting for Reuters by Christopher Walljasper in Chicago.

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