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Live cattle eases on ample supply, lower cash trade - CME

29 July 2022

Lean hog futures end mixed

Chicago Mercantile Exchange (CME) live cattle futures moved lower on Thursday, pressured by falling cash cattle prices and abundant market-ready cattle in the Southern US Plains, reported Reuters.

"We are still seeing liquidation of the cow herd. We are still seeing heavy placements on heifers," said Scott Varilek, broker at Kooima Kooima Varilek Trading Inc.

The increase in heifers is an indication that cow/calf operations continue to reduce herd sizes as drought conditions wither pasture and high feed prices push operating costs higher.

Cash cattle trades slid on Thursday, with the Northern Plains trade seeing moderate to good demand, but slipping as much as $5.50 lower to $138.00 per cwt, while Southern Plains cattle traded at $135.00 per cwt.

CME August live cattle futures fell 0.625 cents to 136.175 cents per lb, while the most-active October  contract trimmed 0.500 cents to 141.825 cents.

Wholesale beef prices eased for a second day, with choice cuts slimming 22 cents to $267.77 per cwt, according to the US Department of Agriculture, while select cuts trimmed $1.00 to $240.81 per cwt.

CME feeder cattle futures firmed, with most-active September feeder cattle futures down 1.650 cents to 180.200 cents per lb.

Meanwhile, CME lean hog futures were mixed on Wednesday, with nearby futures supported by higher cash index trade, while October futures eased on the anticipation of seasonally larger hog supplies by the fall.

"The supply is still just a little bit tight," said Varilek.

Hog producers have struggled with disease that has shrank available hog supplies recently, pushing the price of market-ready hogs higher. Varilek said it might take longer than usual for producers to replenish supplies.

"We just haven't gotten the disease problems under control," he said.

CME's nearby August lean hog futures firmed 0.525 cents to 119.125 cents per lb, while the most-active October hogs eased 0.125 cents to 96.325 cents.

The CME Lean Hog Index, a two-day weighted average of cash hog prices, added 25 cents to $119.73 per cwt.

Source: Reuters



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