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Live cattle retreat from 2-month high - CME

25 April 2022

Hogs end higher

Live cattle futures on the Chicago Mercantile Exchange (CME) ended lower on Friday in a profit-taking setback from two-month highs amid worries about inflation curbing consumer demand for beef, reported Reuters

Larger-than-expected numbers of US cattle on feed announced by the US Department of Agriculture (USDA) after the CME close could pressure futures on Monday.

CME June live cattle futures fell 1.475 cents on Friday to settle at 138.425 cents per pound, turning down after rising in early moves to 140 cents, the contract's highest since February 24.

CME feeder cattle ended mixed, with May down 0.975 cent at 163.875 cents per pound and most-active August feeders up 0.450 cent at 176.900 cents a pound.

Higher cash cattle prices buoyed futures this week, but concerns about inflation pressured the market on Friday as Wall Street equity markets tumbled.

Wholesale beef prices have been falling since mid-April, possibly due to cold weather slowing the start of the US grilling season, said Altin Kalo, economist at Steiner Consulting Group.

"People have not really gotten started with grilling yet. And then you have the demand effects from higher inflation and gas prices. High-dollar items such as beef tend to not fare very well," Kalo said.

After the close, the USDA reported the number of US cattle on feed as of April 1 at 12.1 million head, up 2% from a year earlier, while analysts surveyed by Reuters on average expected a smaller increase of only 0.4%. 

The government said cattle placements in feedlots during March were roughly steady with a year ago, while analysts on average expected a 7.8% decline. 

"It's a bearish report," Kalo said of the larger-than-expected numbers.

In its monthly Cold Storage report, the USDA said US frozen beef supplies totalled 536.887 million pounds at the end of last month, an all-time high for March. 

Frozen pork supplies were up 8% from last year, the USDA said.

CME lean hog futures closed higher, snapping a three-session slide as traders covered short positions ahead of the weekend. Benchmark June lean hogs settled up 1.600 cents at 118.775 cents per pound.

Source: Reuters



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