Chicago | Reuters — U.S. live cattle futures fell more than two per cent on Monday, pressured by ample beef supplies and fund-driven selling as Wall Street equities declined, analysts said.
Feeder cattle futures fell even harder, dropping by three per cent as U.S. corn futures rose to almost $5 a bushel for the first time since 2014, threatening cattle feeding margins (all figures US$).
Chicago Mercantile Exchange (CME) February live cattle futures settled down 2.725 cents at 112.3 cents/lb. and CME March feeder cattle fell 4.2 cents to end at 136.025 cents/lb.
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Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
“Feeder cattle may have pulled the live cattle down,” said Doug Houghton, analyst at Brock Capital Management.
Worries about surging coronavirus cases weighed on global equity markets, a factor that tends to raise uncertainty about U.S. consumer demand for beef.
Wholesale beef prices rose on Monday, but ample supplies of cattle signaled a headwind, with average weights running higher than a year ago.
“Once we get into the second quarter (of 2021), there should be a drop-off, but right now, the live cattle market is looking at some big first-quarter supplies,” Houghton said.
Lean hog futures rose, bucking the weakness in cattle futures, with CME February lean hogs settling up 0.95 cent at 71.225 cents/lb.
Rising pork prices lent support. Wholesale ham prices have been particularly strong in recent days, reaching $72.83/cwt on Thursday, up from $56.20 on Dec. 28, according to the U.S. Department of Agriculture.
Monday’s midday USDA pork cutout data indicated a $25/cwt jump in ham prices to $98.24, catching traders’ attention. However, USDA’s updated afternoon price data, released after the CME close, showed a drop of $4.40, to $68.43/cwt, and the overall pork carcass price fell by 81 cents on the day.
— Reporting for Reuters by Julie Ingwersen in Chicago.
