Feeder cattle dip to three-week low - CME

Lean hog futures lack strong direction
calendar icon 27 September 2023
clock icon 2 minute read

Chart-based and fund selling dragged Chicago Mercantile Exchange (CME) live cattle futures to their lowest level in more than a week on Tuesday while feeder cattle hit a three-week low, Reuters reported, citing traders.

Most-active lean hog futures also came under pressure.

Steep losses on Wall Street set a negative tone for cattle futures, traders said, as weakness in the economy can fuel expectations for reduced consumption of pricey beef.

"Looks to me like the cattle got caught in a risk-off play with the stock markets getting shellacked today," said Dan Norcini, an independent livestock trader.

Most-active December live cattle hit their lowest price since Sept. 14 at 188.425 cents and closed down 2.750 cents at 188.475 cents.

October feeder cattle finished 4.950 cents weaker at 253.875 cents per pound. The contract touched its lowest price since Sept. 5 at 253.525 cents.

In lean hog futures, the market is showing a lack of strong direction, brokers said.

October futures settled up 0.100 cent at 81.625 cents per pound, while most-active December hogs eased 0.175 cent to end at 72.350 cents.

On Thursday, the US Department of Agriculture is slated to issue a quarterly Hogs and Pigs report that analysts expect will show the nation's herd on Sept. 1 was slightly smaller than a year ago. Producers have struggled with losing money this year due to weak pig prices and high operational costs.

"One of the things that keeps working against hog producers is that the sows keep dropping more and more pigs per litter," Norcini said.

"What happens is that while there is sow liquidation taking place and a lack of expansion, the increases in productivity are helping to offset that so that we end up with more hogs than might otherwise be expected."

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