Livestock futures rally on technical trading, wholesale pricing - CME

Cattle futures rebound
calendar icon 4 March 2024
clock icon 2 minute read

Chicago Mercantile Exchange (CME) cattle futures rebounded on Friday, capping a volatile week of trading with a flurry of technical moves amid signs that consumer demand for beef remains strong, reported Reuters.

Early in the session, market participants jumped back into the market after margin-related selling on Thursday sent feeder and live cattle future prices lower at month's end, analysts said.

And as funds rolled fresh investment into their long positions in the livestock market, news that wholesale beef prices were higher Friday morning gave cattle futures traders a psychological boost, analysts said.

Choice cuts were priced at $306.11 per hundredweight (cwt), up $1.91 from Thursday, while select cuts were $1.81 higher at $295.99 per cwt, according to US Department of Agriculture data.

Meanwhile, pork cutout prices also firmed, particularly for bellies, which jumped $25.97 per cwt on Friday morning, according to USDA data. That increase came as a surprise to the market, said independent livestock trader Dan Norcini.

"Normally, when beef gets expensive, consumers tend to shift to pork as price-conscious consumers are looking for a cheaper option," Norcini said.

But with signs that demand is up for both, "the open interest just poured it, especially into the hog market," he said.

Separately, the USDA said that meatpackers slaughtered an estimated 484,000 hogs on Friday, compared to 482,000 hogs a week ago and 465,935 hogs a year ago.

Packers also slaughtered an estimated 100,000 cattle, down from 119,000 cattle a week ago and 116,228 cattle a year ago.

Lean hogs ended the session higher, with the June, July, August and October contracts all setting new life-of-contract highs.

April feeder cattle closed 4.275 cents higher at 258.00 cents per pound. CME April live cattle settled up 3.100 cents at 188.450 cents per pound.

April lean hogs settled up 1.450 cents at 88.075 cents per pound. June hogs closed 1.850 cents higher at 102.050 cents per pound.

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