Chicago | Reuters — Chicago Mercantile Exchange live cattle futures eased on Monday, remaining near recent highs as back-month contracts climbed to new highs on expectations of tighter supplies to come.
CME February live cattle futures settled down 0.775 cent at 138.925 cents/lb., though back-month contracts starting with August 2022 found new life-of-contract highs (all figures US$).
“The slaughter has been extremely high,” said Joe Kooima, commodity broker at Kooima Kooima Varilek Trading Inc. “Its just the market anticipating a cattle cycle where we’ve had enough go to slaughter, there’s not going to be as many numbers.”
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Cattle slaughter eased to 112,000 head processed, the U.S. Department of Agriculture said, down 4,000 head from a week ago but even with the same day last year.
CME March feeder cattle futures settled down 0.425 cent at 169.525 cents/lb.
Live cattle trade firmed to round out 2021, with southern Plains markets trading $138/cwt last week, while Nebraska producers found $140/cwt.
Boxed beef prices climbed, with select cuts adding 67 cents, to $258.90/cwt, while choice cuts gained 77 cents, to $266.03/cwt.
Meanwhile, lean hog futures fell, with CME February hogs dropping 0.35 cents at 81.125 cents/lb.
Despite the step back, nearby hog futures remain supported by tighter supplies, Kooima said.
“There are some packers asking around to fill some slots. That’s quite uncharacteristic for this time of year,” he said.
Hog slaughter was up 2,000 head from last week at 471,000 head processed, though it trailed year-ago numbers by three per cent, USDA said.
The Lean Hog Index, a two-day weighted average of cash hog prices, continues to trail the futures market at $71.75/cwt.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
