Cattle futures plunge for second straight session - CME

February hog futures fall
calendar icon 4 December 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) cattle futures plunged for a second straight session on Friday on fund long liquidation, closing out a volatile week of trading in the livestock pits with prices for live and feeder cattle contracts ending near the week's lows, reported Reuters.

Some concerns about consumer demand for beef amid historically high prices and signs that feed corn values may have reached a bottom also anchored the cattle market.

Futures tumbled despite the spot live cattle contract's discount to cash prices and despite improving beef packer margins.

"You're seeing technical liquidation... large speculators have cut their long position sharply and there's some room for more liquidation there," said Doug Houghton, an analyst for Brock Associates.

Actively traded February live cattle were 2.700 cents lower at 169.125 cents per pound. Spot December futures were down 1.600 cents at 169.275 cents per pound, widening their discount to the cash market, which traded this week at mostly $175 per cwt, equivalent to 175 cents per pound.

CME January feeder cattle fell 5.525 cents to 214.425 cents per pound as benchmark corn futures rose for a third straight day after sinking to a near-three-year low earlier in the week.

The cattle slaughter this week, including Saturday, was estimated at 635,000 head, down from 660,000 head in the same week last year, the US Department of Agriculture said.

Average beef packer margins on Friday improved to a negative $1.10 per head, up from a negative $27.80 a week ago, according to livestock marketing advisory service HedgersEdge.

CME lean hog futures followed cattle contracts lower, retreating after three days of gains that lifted prices by nearly 7% from contract lows earlier in the week.

February hogs fell 1.375 cents to settle at 70.100 cents per pound.

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