CME live cattle futures hit three-week high

Lean hog futures closed lower
calendar icon 21 November 2022
clock icon 2 minute read

Live cattle futures on the Chicago Mercantile Exchange (CME) hit the highest in nearly three weeks on Friday, supported by firm cash cattle markets and what appeared to be speculative buying, Reuters reported, citing analysts.

Most-active CME February live cattle futures settled up 0.450 cent at 155.850 cents per pound after reaching 156.125 cents, the contract's highest since November 1. The spot December contract rose 0.325 cent to finish at 153.075 cents per pound.

CME January feeder cattle ended up 0.800 cent at 180.775 cents per pound.

Live cattle drew support this week as cash cattle traded in Kansas at $151 to $152 per hundredweight (cwt), up $1 to $2 from last week, and in Texas at $150 to $151 per cwt, steady to $1 higher from last week.

"The cash market being firm is a part of it," said Alton Kalo, economist at Steiner Consulting Group, of the strength in cattle futures. "There is some speculative interest that wants to come in. The Cattle on Feed report that came out certainly proved them right."

After the CME close, the US Department of Agriculture's monthly Cattle on Feed report put the number of cattle placed into feedlots during October at 2.108 million head, down 6% from a year ago, while analysts surveyed by Reuters on average expected a decline of only 3.5%.

The USDA reported the number of cattle on feed as of November 1 at 11.706 million head, down 2% from last year, while analysts on average expected a decline of 1.7%.

"It was a bullish report," Kalo said. "The supply of market-ready cattle continues to decline. So that sets the stage for tighter supplies as we go into the first quarter," he added.

With markets closed on November 24 for Thanksgiving, meat packers have a short week next week to buy enough cattle for a full week of slaughter the following week.

CME lean hog futures closed lower, with the most-active February contract snapping a four-session advance. February hogs settled down 1.250 cents at 89.550 cents per pound.

Front-month December fell 0.750 cent to finish at 84.225 cents a pound, but gained relative to the February contract on spreads.

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