Cattle, hogs sag as traders track US slaughtering
Meatpacker shutdowns slowed slaughter last week
22 January 2024
2 minute read
By: Chicago Mercantile Exchange (CME) cattle futures eased on Friday as the market retreated from November highs, and hog futures also closed lower, reported Reuters.
Traders are monitoring how quickly meatpackers can make up for recent slaughtering disruptions caused by severe winter weather, said Rich Nelson, chief strategist for brokerage Allendale.
Meatpackers slaughtered an estimated 121,000 cattle on Thursday, compared to 105,000 a week ago and 124,048 cattle a year ago, the US Department of Agriculture (USDA) said.
The USDA separately reported the choice boxed beef cutout at $295.50 per cwt, down $0.79 from Thursday. Expectations for a setback in wholesale prices weighed on futures, after recent gains, Nelson said.
"The trade is thinking our strong rebound in wholesale beef is about over," he said.
Most-active CME April live cattle futures ended down 0.275 cent at 177.375 cents per pound after rising on Thursday to the highest level since Nov. 22.
March feeder cattle eased 0.600 cent to 231.950 cents per pound, a day after rising to the highest price since Nov. 20.
After the close of trading, the USDA said in a monthly report that there were 11.9 million cattle on feed for slaughter on Jan. 1, up 2.1% from a year earlier. The increase matched analysts' expectations.
Placements of cattle in feedlots during December totaled 1.70 million head, down 4.5% from 2022. That was near the 4.6% decline that analysts expected.
The data is largely neutral for cattle futures, analysts said. Supplies will tighten toward the end of the year, they said, after ranchers reduced their herds over the past three years as dry weather reduced the amount of pasture available for grazing.
"We agree with the tightening supply narrative at the end of this year," Nelson said.
CME February lean hog futures finished down 0.350 cent at 70.750 cents per pound. April hogs slipped 0.300 cent to 78.150 cents.
