14 December 2021

2 minute read

North America

Chicago Mercantile Exchange (CME) live cattle futures closed higher on Monday, bouncing off a three-week low on technical buying, analysts said.

CME February live cattle settled up 0.775 cent at 138.850 cents per pound, rebounding after a dip to 136.850 cents, just below the contract's 40-day moving average and its lowest since 18 November, reported Reuters.

Cash cattle seemed poised to trade this week at around $138 per hundredweight (cwt), analysts said, down from last week's peak of $140 and the previous week's top of $142. The trend reflects slowing demand from meat packers ahead of two holiday-shortened weeks.

"The feeling is, we are buying cattle for a short kill week next week, which is one of the reasons cash is under some pressure," said Don Roose, president of Iowa-based US Commodities.

Still, he added, with front-month December live cattle futures hovering near 137 cents per pound, or $137 per cwt, "it looks like the futures got too big of a discount versus cash."

Wholesale boxed beef prices were mixed, with choice cuts falling $1.32 to $263.22 per cwt, the lowest since 6 April, while select cuts rose $1.40 to $253.64 per cwt, according to the US Department of Agriculture.

CME March feeder cattle futures rose 1.175 cents to end at 166.475 cents per pound, supported by weaker corn prices signaling cheaper feed costs.

For hogs, CME lean hog futures fell after Friday's 4% surge. The benchmark February hog contract finished down 0.275 cent at 80.750 cents per pound while front-month December ended down 0.775 cent at 72.275 cents.

The CME's lean hog index, a two-day weighted average of cash hog prices, stood at 71.58 cents per pound.

"The futures has a premium (to cash). And whether we can earn that premium is a real question mark, with China basically out of the export market for US pork, as it feels like they have re-built their herd," Roose said.

Source: Reuters