Cattle, hog markets close at highest levels since November - CME
USDA hog and pig reports due later this week
18 December 2023
2 minute read
By: Chicago Mercantile Exchange (CME) hog and cattle futures closed at their highest levels since November on Friday as short covering lifted the livestock markets, Reuters reported, citing traders.
Lean hog futures extended gains after climbing by their daily trading limit on Thursday. The most-active February contract has rebounded since flirting with its contract low on Wednesday.
February lean hogs on Friday ended up 1.425 cents at 71.900 cents per pound, its highest closing price since Nov. 21.
Gains in the stock market this week, driven by expectations that interest rates will decline next year, helped support livestock futures, said Doug Houghton, analyst for Brock Associates.
"It's favorable for the demand outlook any time the general economic data is positive," he said.
CME February live cattle ended up 1.425 cents at 169.350 cents per pound, its highest closing price since Nov. 30. January feeder cattle rose 1.550 cents to end at 220.900 cents per pound, its highest closing price since Nov. 29.
Live cattle futures had been oversold after the market hit a 14-month low last week, traders said.
"They've kind of firmed up this week on short covering and support from speculative bargain hunting," Houghton said.
Cattle prices had soared earlier this year as US producers slashed herds in the face of a drought that reduced the availability of land for grazing. However, placements of cattle into feedlots in September and October exceeded last year's levels, as dryness continued to drive herd reductions.
The US Department of Agriculture (USDA) on Dec. 22 is slated to issue data on November placements and the number of cattle on feed as of Dec. 1. The government is due to release a separate quarterly report on the US hog herd the same day.
Meatpackers slaughtered an estimated 478,000 hogs on Friday, down from 479,000 hogs a week earlier, and 121,000 cattle, compared to 122,000 cattle a week ago, the USDA said.
