Feeder cattle futures climb, lean hogs drop - CME

US exporters saw net cancellations of 5,500 tonnes of pork
calendar icon 9 December 2022
clock icon 2 minute read

Feeder cattle futures on the Chicago Mercantile Exchange (CME) climbed on Thursday, supported by sluggish corn futures, while live cattle gains were muted as meatpackers offered lower cash cattle prices this week, Reuters reported, citing traders.

"They've backed off a bit in the cash market," said Doug Houghton, technical analyst at Brock Capital Management. "The holidays will cause slaughter disruptions, so you look forward to the second half of this month, they wont need as many cattle."

Cash cattle traded $1.00 lower in the northern US plains at $156.00 per hundredweight (cwt), while cash bids in the southern US plains were steady-to-lower, mostly trading at $155.00 per cwt, while slipping to $153.00 in parts of the Texas panhandle, the US Department of Agriculture (USDA) said.

Slaughter rates have also slowed, with processors killing 508,000 head this week through Thursday, down 4,000 head from the same period last week, according to USDA data.

Packer profits have suffered recently as beef prices decline, while cash cattle prices remain higher, said Houghton.

Boxed beef prices continue to struggle for direction, with choice cuts falling $1.68 to $247.28 per cwt, while select cuts firmed 78 cents to $220.55 per cwt, the USDA said.

Most-active CME January feeder cattle rose 2.575 cents to 183.475 cents per pound.

CME benchmark February live cattle added 0.375 cent to 153.925 cents per pound, while the spot December contract gained 0.500 cent to 152.425 cents per pound.

Meanwhile, lean hogs dropped on disappointing export sales, while domestic holiday demand has already been satisfied.

"We're getting close to Christmas, so I think a lot of the pre-holiday needs have been bought," said Houghton.

US exporters saw net cancellations of 5,500 tonnes of pork during the week ended Dec. 1, the USDA said.

"That's disappointing because this time of year, people are looking for China to be stocking up ahead of their Lunar New Year holiday in a couple of months," Houghton added.

CME February lean hogs fell 1.95 cents to 84.700 cents per pound, after reaching to 83.100, its lowest since Oct. 17.

Nearby December hogs lost 0.375 cent to 82.000 cents per pound.

The CME's lean hog index, a two-day weighted average of cash hog prices, fell 16 cents to $82.78 per cwt.

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