Lean hog, live cattle futures end higher - CME

A setback in grain prices sparked a round of buying
calendar icon 18 November 2022
clock icon 2 minute read

Live cattle futures on the Chicago Mercantile Exchange (CME) ended higher on Wednesday as expectations of tightening cattle supplies and a setback in grain prices sparked a round of buying, Reuters reported, citing traders.

The most-active CME live cattle futures, for February delivery, settled up 1.200 cents at 154.250 cents per pound, a day after finding chart support at the contract's 200-day moving average. The spot December contract rose 0.525 cent to finish at 151.800 cents per pound.

"Fundamentally, both cattle and hogs are still bullish because of our lower supplies," said Sherman Newlin, an analyst with Risk Management Commodities.

Ahead of the US Department of Agriculture's monthly Cattle on Feed report due on Friday, analysts surveyed by Reuters on average expected the government to report the number of cattle in US feedlots as of November 1 at 11.745 million head, down 1.7% from a year ago. Analysts on average estimated feedlot placements in October at 2.168 million head, down 3.5% from a year ago.

CME January feeder cattle settled up 0.450 cent at 177.475 cents per pound, rebounding a day after dipping to a four-week low.

Cattle futures had sunk on Tuesday as grain prices climbed, signaling potentially higher costs for livestock feed. But corn, wheat and soy futures retreated on Wednesday, helping cattle futures to firm.

Traders shrugged off pressure from declining wholesale beef prices. Choice cuts fell $1.27 to $257.09 per hundredweight (cwt), while select cuts fell by $0.41 at $231.35 per cwt, according to USDA data.

Cash cattle traded lightly in Kansas and the Texas Panhandle at $150 per cwt, steady with last week, the USDA reported.

CME lean hog futures inched higher for a third straight session on expectations of tightening hog supplies and optimism about pork demand from China.

CME December lean hog futures settled up 0.250 cent at 85.575 cents per pound. Most-active February hogs LHG3 ended up 0.275 cent at 90.350 cents after reaching 90.725 cents, a three-week high.

An active hog slaughter pace was supportive. Meatpackers slaughtered an estimated 493,000 hogs on Wednesday, up from 476,000 head a week ago, the USDA said. The cattle slaughter totalled 129,000 head, steady with a week ago.

Traders await Thursday's weekly USDA export sales report which will detail sales of US pork and beef in the week ended November 10.

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