Spot live cattle futures near 8-year top - CME
Hog futures closed lower
16 February 2023
2 minute read
By: Front-month live cattle futures on the Chicago Mercantile Exchange (CME) reached a near eight-year high on Wednesday, supported by tightening US cattle supplies and rising wholesale beef prices, while the most actively traded contracts drifted lower as market players awaited more direction from cash cattle markets, reported Reuters.
CME's spot February live cattle futures contract settled up 0.400 cent at 162.550 cents per pound after climbing to 162.800 cents, the highest on a continuous chart of the front contract since April 2015. But the benchmark April contract finished down 0.075 cent at 164.600 cents per pound.
"The bullish fundamentals in cattle are as good as I have ever seen," said Dan Norcini, an independent livestock trader, citing a shrinking US cattle herd and strong cash prices paid in recent weeks for market-ready cattle.
"But that doesn't impress the Board because (traders) need to see the cash market. If the cash isn't trading, people are afraid to get in there and buy," Norcini said. Last week, cash market activity picked up late on Friday, and some traders expected another late start this week.
CME March feeder cattle futures FCH3 ended up 0.675 cent at 187.325 cents per pound, supported by declines in corn futures COR/that signaled cheaper feed costs.
Meanwhile, wholesale beef prices firmed. Choice cuts were up $3.61 for the day at $275.67 per hundredweight (cwt), according to US Department of Agriculture (USDA) data, the highest since Jan. 17. Select cuts rose $2.41 at $261.19.
CME hog futures closed lower with the bellwether April contract losing ground to back months, reversing the trend of the previous two days. April hogs settled Wednesday down 0.750 cent at 86.500 cents per pound, and June hogs fell 0.525 cent to end at 104.300 cents.
The CME Lean Hog Index, a two-day weighted average of cash hog prices, rose by 54 cents to $75.18.
The USDA priced pork carcasses at $80.94 per cwt Wednesday afternoon, down 94 cents from Tuesday.
Traders await the USDA's weekly export sales report on Thursday for a reading of export demand for US pork and beef.
