Chicago | Reuters – Chicago Mercantile Exchange live cattle futures jumped on Thursday, buoyed by rising cash cattle prices and a government inventory report confirming that the total number of U.S. cattle fell to a 73-year low.
CME April live cattle futures LCJ24 settled up 2.475 cents at 183.175 cents per pound, nearing Monday’s 2-1/2-month high of 183.450 cents. March feeder cattle futures FCH24 surged 4.725 cents to finish at 244.875 cents per pound after posting a three-month top at 245.6 cents.
The markets got off to a strong start after the U.S. Department of Agriculture (USDA) late on Wednesday reported the total number of U.S. cattle as of Jan. 1 at 87.2 million head, down 2 per cent from a year earlier and the lowest level since 1951. Ranchers have slashed their herds as a multi-year drought in the western U.S. reduced the land available for grazing and raised feeding costs.
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U.S. livestock: Tight cattle supply helps CME futures rebound from collapse
Chicago Mercantile Exchange live cattle and feeder cattle futures rebounded on Friday from a steep drop during the previous session.
“The (cattle) numbers are going to tighten as we go forward,” said Don Roose, president of Iowa-based U.S. Commodities. “Maybe with the moisture improving in some of these areas, the cow-calf operations will start to rebuild the herd, but no signs of it yet,” Roose said.
The rally accelerated as market-ready cattle traded in the Texas and Kansas cash markets at around $178 per hundredweight (cwt), up $3 from the bulk of last week’s trades. The higher prices reflect the impact of frigid winter weather in mid-January that reduced cattle weights, Roose said.
Wholesale beef prices were mixed on Thursday afternoon with choice cuts priced at $294.94 per cwt, up 40 cents from Wednesday, while select cuts fell 92 cents at $283.25 per cwt, according to USDA data.
CME hog futures fell on a round of profit-taking after the benchmark April contract set a four-month high this week. April hogs LHJ24 ended down 1.075 cents at 83.750 cents per pound.
The CME’s Lean Hog Index .IHX, a two-day weighted average of cash prices, rose to 72.38 cents per pound, its highest reading since Nov. 23.
The USDA priced the pork carcass cutout late Thursday at $88.59 per cwt, up $1.03 from Wednesday.
Export sales of U.S. pork in the week to Jan. 25 totaled 42,900 metric tons and beef sales totaled 16,700 tons, the USDA said.
