Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed higher on Monday, bouncing off a three-week low on technical buying, analysts said.
CME February live cattle settled up 0.775 cent at 138.85 cents/lb., rebounding after a dip to 136.85 cents, just below the contract’s 40-day moving average and its lowest since Nov. 18.
Cash cattle seemed poised to trade this week at around $138 per hundredweight (cwt), analysts said, down from last week’s peak of $140 and the previous week’s top of $142. The trend reflects slowing demand from meat packers ahead of two holiday-shortened weeks.
Read Also
U.S. livestock: Feeder cattle extend rally to new highs
Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.
“The feeling is, we are buying cattle for a short kill week next week, which is one of the reasons cash is under some pressure,” said Don Roose, president of Iowa-based U.S. Commodities.
Still, he added, with front-month December live cattle futures hovering near 137 cents/lb., or $137/cwt, “it looks like the futures got too big of a discount versus cash.”
Wholesale boxed beef prices were mixed, with choice cuts falling $1.32, to $263.22/cwt, the lowest since April 6, while select cuts rose $1.40, to $253.64/cwt, according to the U.S. Department of Agriculture.
CME March feeder cattle futures rose 1.175 cents to end at 166.475 cents/lb., supported by weaker corn prices signaling cheaper feed costs.
For hogs, CME lean hog futures fell after Friday’s four per cent surge. The benchmark February hog contract finished down 0.275 cent at 80.75 cents/lb. while front-month December ended down 0.775 cent at 72.275 cents.
The CME’s lean hog index, a two-day weighted average of cash hog prices, stood at 71.58 cents/lb.
“The futures has a premium (to cash). And whether we can earn that premium is a real question mark, with China basically out of the export market for U.S. pork, as it feels like they have re-built their herd,” Roose said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
