Chicago | Reuters — Feeder cattle futures on the Chicago Mercantile Exchange climbed on Thursday, supported by sluggish corn futures, while live cattle gains were muted as meatpackers offered lower cash cattle prices this week, traders said.
“They’ve backed off a bit in the cash market,” said Doug Houghton, technical analyst at Brock Capital Management. “The holidays will cause slaughter disruptions, so you look forward to the second half of this month, they wont need as many cattle.”
Cash cattle traded $1 lower in the northern U.S. plains at $156 per hundredweight (cwt), while cash bids in the southern U.S. Plains were steady-to-lower, mostly trading at $155/cwt, while slipping to $153 in parts of the Texas panhandle, the U.S. Department of Agriculture said (all figures US$).
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Slaughter rates have also slowed, with processors killing 508,000 head this week through Thursday, down 4,000 head from the same period last week, according to USDA data.
Packer profits have suffered recently as beef prices decline, while cash cattle prices remain higher, said Houghton.
Boxed beef prices continue to struggle for direction, with choice cuts falling $1.68, to $247.28/cwt, while select cuts firmed 78 cents, to $220.55/cwt, USDA said.
Most-active CME January feeder cattle rose 2.575 cents, to 183.475 cents/lb.
CME benchmark February live cattle added 0.375 cent, to 153.925 cents/lb., while the spot December contract gained 0.5 cent to 152.425 cents/lb.
Meanwhile, lean hogs dropped on disappointing export sales, while domestic holiday demand has already been satisfied.
“We’re getting close to Christmas, so I think a lot of the pre-holiday needs have been bought,” said Houghton.
U.S. exporters saw net cancellations of 5,500 tonnes of pork during the week ended Dec. 1, USDA said.
“That’s disappointing because this time of year, people are looking for China to be stocking up ahead of their Lunar New Year holiday in a couple of months,” Houghton added.
CME February lean hogs fell 1.95 cents, to 84.7 cents/lb., after reaching to 83.1, its lowest since Oct. 17.
Nearby December hogs lost 0.375 cent, to 82 cents/lb.
The CME’s lean hog index, a two-day weighted average of cash hog prices, fell 16 cents, to $82.78/cwt.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
