Live cattle futures hit one-month low - CME

Lean hog futures declined
calendar icon 20 January 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) live cattle futures fell on Thursday with the most-active April contract hitting a one-month low on technical selling, soft cash cattle markets and weak wholesale beef prices, Reuters reported, citing traders.

CME February live cattle settled down 0.850 cent at 155.950 cents per pound, near its 50-day moving average, after touching 155.375 cents, its lowest since Dec. 20. The most-active April contract fell below its 50-day moving average and finished down 1.100 cents at 159.125 cents per pound after a dip to 158.550, its lowest since Dec. 9.

CME March feeder cattle futures fell 1.625 cents to settle at 180.100 cents per pound.

Cash cattle has been slow to trade this week in the southern Plains, with a few purchases noted in Kansas at $155 per hundredweight (cwt), down $1 from last week.

One the beef side, the US Department of Agriculture (USDA) priced choice cuts on Thursday afternoon at $271.51 per cwt, down $2.57 from the previous day and the cheapest since Dec. 22.

The lull in demand comes as commodity funds hold their largest net long position in CME live cattle futures since May 2019, leaving the market vulnerable to long liquidation.

"When you don't have a constant supply of bullish news, you are going to get stale longs start to liquidate," said Dan Norcini, an independent livestock trader. "It's hard to get people motivated to step in and buy."

Traders await the USDA's monthly Cattle on Feed report on Friday. Analysts surveyed by Reuters on average expect the government to report the number of cattle in US feedlots as of Jan. 1 at 11.652 million head, down 3.2% from a year ago. Analysts on average estimated feedlot placements in December at 1.784 million head, down 9% from a year ago.

CME lean hog futures declined Thursday on recent weakness in wholesale pork prices and worries about export demand from China.

February lean hog futures ended down 0.675 cent at 76.650 cents per pound, while most-active April futures fell 1.800 cents at 84.400 cents per pound after touching a 3-1/2-month low at 84.075 cents.

Wholesale pork prices firmed from two-year lows set this week, led by higher ham prices. The USDA quoted the pork carcass cutout on Thursday afternoon at $79.57 per cwt, up $1.68 from Wednesday.

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