Chicago | Reuters — Chicago Mercantile Exchange live cattle futures rallied to fresh contract highs on Wednesday on strong cash market prices and rising slaughter rates amid seasonally tightening cattle supplies.
A winter storm moving across the central U.S. on Wednesday did not noticeably impact cattle and beef production, although traders were watching for any impact on cattle weight gains and movement of supplies to market.
Some feedlot cattle traded at higher prices in Nebraska this week and bids in the southern Plains suggest higher prices were possible in Kansas and Texas as well.
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“Cattle slaughter rates have fully come back and we’re coming into tighter cattle numbers seasonally. We’ll have to see if the weaker boxed beef prices will cool some of that demand,” said Matt Wiegand, a commodity broker for FuturesOne.
“The winter storm is causing some delays, but we’re seeing more of that in the hogs. That probably has to do with the location of the pork plants,” he said.
The U.S. Department of Agriculture (USDA) estimated Wednesday’s cattle slaughter at 121,000 head, up from daily levels around 112,000 in early January, as the pandemic disrupted staffing at some plants.
The higher slaughter has pressured wholesale beef prices, with the choice cutout near its lowest in nearly three weeks, according to USDA data.
Wednesday’s hog slaughter was estimated at 432,000 head, down from 475,000 a week ago and 499,000 a year earlier, as the heaviest snow from the winter storm fell in hog production areas.
CME April live cattle set a contract high of 146.95 cents/lb. and settled 1.525 cents higher at 146.9 cents. March feeder cattle ended up 3.175 cents at 166.875 cents/lb.
Benchmark CME April lean hogs settled up 1.45 cents at 99.125 cents/lb. after recording a contract high of 100.275 cents.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
