Chicago | Reuters — U.S. livestock futures had a mixed performance on Tuesday, as the supply of cattle being offered for sale continued to shrink and traders wrestled with uncertainty over pork export demand.
An additional five cases of African swine fever (ASF) were initially found in dead wild boars in Germany. Initial tests were positive but final tests are underway for confirmation, the state government said on Tuesday. China and South Korea have banned pork imports from Germany.
But it is unknown how much China will now use U.S. pork.
“The market is asking, ‘What does this mean for U.S. supplies in the weeks ahead? Do we have capacity to process that and what number do we plug in for exports?'” said Rich Nelson, chief strategist for commodity broker Allendale.
Chicago Mercantile Exchange (CME) October lean hog futures settled up 1.075 cents at 65.7 cents/lb. (all figures US$). Most actively traded CME December hogs ended down 0.525 cent at 63.05 cents/lb.
Profit margins for hog meatpackers on Tuesday dropped sharply to $28.15 per hog, down from $55 a week earlier, according to Denver-based livestock marketing advisory service HedgersEdge.com.
In a seasonal shift, profits tightened for beef meatpackers to $334.70 per head on Tuesday, down from $368.20 a week earlier.
The drop in cattle placed in feedlots in February and March is now being felt in the marketplace, Nelson said. About 19,000 fewer head of cattle are being offered for sale this week, which will help stabilize cash prices — or even push them up, he said.
CME October live cattle futures settled up 0.225 cent at 107.1 cents/lb., while most actively traded December live cattle futures slipped 0.125 cent to 111.575 cents/lb.
October feeder cattle ended up 1.1 cents at 143.7 cents/lb.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.