Chicago | Reuters — U.S. live cattle futures fell on Monday, pressured by expectations of rising supplies as improving weather conditions in the southern U.S. Plains will allow meat processors to increase their slaughter, traders said.
A deep freeze last week across Texas and the southern U.S. Plains caused power failures that shut down meat processors in the region.
“Mother Nature looks much more cooperative this week,” brokerage StoneX said in a note to clients. “We now play catch up and re-fill beef pipelines.”
The U.S. Agriculture Department on Monday reported the daily cattle slaughter at 119,000 head, the highest since Feb. 3. Hog slaughter of 497,000 head was the most since Jan. 20.
Chicago Mercantile Exchange April live cattle futures settled 0.625 cent lower at 123.05 cents/lb., while the spot February contract ended down 0.2 cent at 115.725 cents/lb. (all figures US$).
The April contract ran into technical resistance at its 20-day moving average.
CME April feeder cattle rose 0.6 cent to settle at 143.275 cents/lb.
USDA said on Friday afternoon that the amount of cattle on feed as of Feb. 1 was 101 per cent of the year-ago total. That topped market expectations for 100.8 per cent.
CME April lean hog futures rose 0.625 cent to 85.125 cents/lb.
China’s hog inventories are expected to return to end-2017 levels by around June this year, the country’s agriculture minister said on Monday.
The worst pork shortage period has passed and supplies will be more ample going forward, agriculture minister Tang Renjian told a news briefing.
— Mark Weinraub is a commodities correspondent for Reuters in Chicago.