2 February 2023

2 minute read

By: Global Ag Media

North America

Live cattle futures on the Chicago Mercantile Exchange (CME) closed lower on Wednesday as traders booked profits, one day after the benchmark April contract set a life-of-contract high and the US Department of Agriculture (USDA) reported a 3% year-on-year drop in the size of the US cattle herd, reported Reuters.

CME April live cattle settled down 0.800 cent at 162.225 cents per pound, retreating from Tuesday's contract high of 163.575 cents. Front-month February live cattle ended down 0.425 cent at 158.425 cents.

CME March feeder cattle futures fell 2.900 cents to settle at 183.250 cents per pound.

Cash cattle trade has been thin so far this week, and wholesale beef prices ticked lower on Wednesday, with choice cuts down $1.02 at $265.07 per hundredweight (cwt), extending a three-week seasonal slide.

However, a shrinking US cattle herd underpinned the futures market. The USDA on Tuesday said the total US cattle herd as of Jan. 1 was down 3% from a year ago, and the beef cow herd dropped to 28.9 million head, its lowest level since 1962, following a drought that raised feed costs across the US Plains.

"The takeaway is, from the consumer standpoint, they need to brace for high-priced beef for a few years. We have got to re-build the cattle herd, and that usually takes three years," said Don Roose, president of Iowa-based US Commodities.

In the hog markets, CME February lean hog futures settled down 0.900 cent at 73.975 cents per lb, while most-active April hogs ended down 2.125 cents at 84.300 cents per lb.