Chicago | Reuters — Chicago Mercantile Exchange feeder cattle futures crumbled on Wednesday on profit-taking after the market reached a four-month high this week, analysts said.
Live cattle futures also weakened, while lean hogs ended slightly higher.
Feeder cattle have climbed more than 11 per cent so far this year, boosted by tight supplies, fund buying, and low prices for corn used for livestock feed. U.S. ranchers slashed the nation’s cattle herd to its smallest level in more than 70 years as drought reduced land available for grazing.
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Corn prices on Wednesday reached a two-week high in the most-active contract Cv1, as the grain market recovered from recent three-year lows. The rebound helped pressure feeder cattle, analysts said.
“What was happening in corn futures was essentially an excuse to take short-term profits on the day,” said Dan Norcini, an independent livestock trader.
April feeder cattle FCJ24 closed 3.85 cents lower at 255.100 cents per pound and touched its lowest price in more than a week. The contract on Monday had advanced to its highest level since October.
CME April live cattle LCJ24 slid 1.6 cents to end at 186.125 cents per pound. The contract on Tuesday had traded near a four-month high reached last week.
Traders were monitoring a major wildfire in northern Texas, the biggest U.S. cattle-producing state. Texas Governor Greg Abbott issued a disaster declaration for 60 counties on Tuesday and directed the authorities to activate personnel to provide support for livestock, among other actions.
Some traders also were selling cattle futures and buying lean hogs in spread trades, Norcini said.
April lean hogs LHJ24 settled up 0.1 cent at 86 cents per pound. June hogs LHM24 closed 0.225 cent higher at 99.550 cents and set its highest price in nearly a year.
Average hog weights in Iowa, southern Minnesota and South Dakota declined to 287.7 pounds in the week ended Feb. 24 from 288 pounds the previous week, U.S. government data show.
On Thursday, traders will review weekly U.S. beef and pork export sales data.
–Additional reporting for Reuters by PJ Huffstutter.
