U.S. livestock: CME live cattle futures plunge before USDA report

(USDA.gov via Flickr)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures slumped on Friday, with nearby contracts down the three-cents-per-pound price limit, ahead of the U.S. Department of Agriculture’s monthly Cattle-On-Feed report at 2 p.m. CT.

Analysts expect the report to show a decline in the number of cattle placed in feedlots last month.

February and April live cattle finished at 150.35 cents and 148.8 cents/lb., respectively (all figures US$). Because of Friday’s limit-down move, trading limits will be expanded to 4.5 cents on Monday.

Fund liquidation and sell stops further weighed on CME live cattle.

The dollar’s surge, which could hurt U.S. meat exports, discouraged market bulls who were also sidelined by the lack of supportive fundamental direction.

Friday morning’s choice wholesale beef price fell $1.77 per hundredweight (cwt) from Thursday to $253.88. Select rose 54 cents to $249.43, USDA said.

So far, slaughter-ready or cash cattle in the U.S. Plains fetched $158-$160/cwt, down from mostly $162 to $164.50 last week, feedlot sources said.

Feedlots and packers may be waiting for USDA’s cattle report results before buying remaining livestock, a trader said.

CME feeder cattle finished with most contracts down the 4.5-cent limit on firm corn prices and limit-down live cattle futures.

January closed 2.275 cents/lb. lower at 213.7 cents. March and April ended limit down at 201.825 cents and 202.55 cents. Feeder cattle’s trading limit will be expanded to 6.75 cents on Monday.

Hogs again hit two-year low

CME lean hogs sank to a two-year low for a fourth consecutive day on Friday as cash and wholesale pork prices struggled, traders said.

February closed 2.3 cents/lb. lower at 69.3 cents, and April fell 2.225 cents to 70.65 cents.

Cash hogs in the Midwest on Friday traded steady to $1/cwt lower from Thursday, according to regional hog dealers.

USDA data showed the morning’s wholesale pork price had dropped 99 cents/cwt from Thursday to $83.71.

Hogs and pork are readily available due to affordable feed and moderate winter temperatures that have allowed animals to remain heavy compared with last year, an analyst said.

Hog futures were further pressured by sell stops and the steep drop in live cattle futures.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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