Chicago | Reuters — Benchmark live cattle futures on the Chicago Mercantile Exchange eased on Friday, pressured by softening cash trade across the U.S. Plains, though markets remain supported by tightening supplies as producers continue to liquidate their herds, analysts said.
“Our short-term supply issues are still front and centre. We’re running two-three per cent higher than last year’s slaughters. On top of that, we have six months in a row of no significant drops in feedlot placements,” said Rich Nelson, chief strategist at Allendale Inc.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
CME October live cattle eased 0.085 cent, to 143.275 cents/lb., while the most-active December contract lost 0.725 cent, to 147.005 cents (all figures US$).
CME November feeder cattle fell 3.2 cents to 174.625 cents/lb., after Chicago Board of Trade corn futures gained on smaller-than-expected stocks reported by the U.S. Agriculture Department.
Cash cattle trade in the northern U.S. Plains slowed to end the week, trading around $145/cwt, while southern U.S. Plains cattle traded a dollar lower at $142/cwt, USDA said.
Cattle processing slowed on Friday, with 115,000 head slaughtered, down 10,000 from the week prior and the lowest daily slaughter number reported since Aug. 5.
Meanwhile, CME lean hog futures firmed on Friday, supported by USDA’s quarterly hog and pigs report released Thursday after the close that showed smaller-than-expected supplies of hogs.
“I think in the short term, the December contract is pricing in its whole-year low right now,” said Nelson. “We’re pricing in all the winter bearishness.”
CME October hogs eased 0.225 cent, to 89.225 cents/lb., while most-active December hogs added 0.5 cent, to 76.225 cents/lb.
The CME’s Lean Hog Index, a two-day weighted average of cash hog trade, fell 0.46 cent, to 95.14 cents/lb.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
