Chicago | Reuters — Chicago Mercantile Exchange live cattle and feeder cattle futures closed higher on Monday on technical buying and support from firmer equities, analysts said.
Live cattle continue to recover from a recent decline and fund selling, with the most-active February contract LCG24 up 4.4 per cent from a 14-month low on Dec. 7.
“I think we overshot the mark to the downside with the massive fund selling,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.
CME February live cattle LCG24 finished 0.275 cent firmer at 169.625 cents per pound, its highest closing price since Nov. 30.
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Gains in the market are helping to bring futures more in line with cash prices.
Cash cattle traded at $170 per cwt in Texas and Kansas on Friday, down about $1 from the week before, traders said. Cash trades around $167 to $168 per cwt in Nebraska and Iowa last week were down about $1 to $3 from the previous week.
“We’ve now got cash-futures basis back within reasonable bounds,” broker StoneX said.
CME January feeder cattle FCF24 climbed 2.275 cents to 223.175 cents per pound, its highest closing price since Nov. 22.
Gains in stocks helped to support cattle by fueling projections for U.S. beef demand if the economy is in good shape, analysts said. The main Wall Street indexes are looking to end 2023 on a high note as signs of slowing inflation boosted expectations that the U.S. central bank will soon ease its monetary policy.
In the pork market, CME February lean hogs LHG24 closed down 0.325 cent at 71.575 cents per pound after jumping earlier to the highest price since Nov. 22 at 72.450 cents.
The U.S. Department of Agriculture on Friday is slated to issue quarterly data on the size of the U.S. hog herd, along with separate monthly reports on the number of U.S. cattle on feed and on inventories of frozen meat in U.S. cold storage facilities.
