Live cattle, lean hog futures decline in technical moves

Cattle and hog supplies expected to be tighter going forward
calendar icon 7 November 2022
clock icon 2 minute read

Chicago Mercantile Exchange (CME) lean hog futures declined on Friday, with the benchmark December contract hitting a near three-week low in what appeared to be featureless technical selling, Reuters reported, citing traders.

CME December hogs settled down 0.400 cent at 82.975 cents per lb after touching 82.825, the lowest since Oct. 17, and falling below chart support at its 200-day moving average.

Commodity funds hold a net long position in CME lean hog and live cattle futures, leaving both markets prone to bouts of long liquidation in the absence of supportive news. 

"We seem to be treading water here," said Sherman Newlin, an analyst with Risk Management Commodities. "Big picture, cattle and hog supplies are going to be tighter going forward because we are not rebuilding the herds. Eventually there is going to be support in there (for prices), but (today) they are just chopping around."

Wholesale pork prices inched higher. The US Department of Agriculture (USDA) quoted the US pork carcass cutout value late Friday at $96.72 per hundredweight (cwt), up $0.36 from Wednesday.

The USDA reported the week-to-date hog slaughter at 2.413 million head, down from 2.435 million the previous week, but up from the year-ago kill of 2.381 million head. 

CME live cattle futures ended modestly lower with December down 0.300 cent at 151.650 cents per lb. Feeder cattle futures were narrowly mixed, with most-active CME January feeders up 0.200 cent at 179.625 cents per lb.

Cash cattle traded in the southern US Plains this week at $150 per cwt, steady with last week, after firming over the prior four weeks.

Wholesale beef prices declined. Choice cuts were down $1.43 at $263.75 per cwt, USDA data showed. Select cuts fell $1.16 to $231.90 per cwt.

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