Glacier FarmMedia COVID-19 & the Farm

U.S. hogs, cattle drop Friday

U.S. hog futures fell on Friday due in part to talk that Russia may halt imports of U.S. pork and beef beginning on Saturday as amid a conflict over testing meat for the feed additive ractopamine, said analysts and traders.

While Canada began testing for traces of the drug Friday, the United States does not have a testing program in place, complicating negotiations between Russia and United States.

“There was some reaction to the negative news coming out of Russia and expectations that Christmas ham buying will wrap up by early next week,” independent livestock market trader Dan Norcini said of the lower hog market.

“Throw in some holiday-shortened slaughter weeks right around the corner and there really is no incentive for packers to chase hogs right now,” he said.

Prior to Thursday, higher hog prices and diminished wholesale pork demand eroded packer margins which reduced their need for hogs. That also prompted processors to cut slaughter.

The wholesale price for pork on Friday was down 14 cents per hundredweight (cwt) from Thursday to $85.01, according to the U.S. Department of Agriculture (all figures US$).

USDA estimated the hog slaughter this week at 2.364 million head, down 35,000 from last week.

Also, USDA reported the average price for hogs on Friday in the most-watched Iowa/Minnesota direct market dropped $2.04/cwt from Thursday to $81.92. put the average pork packer margin for Friday at a negative $3.80 per head, compared with a negative $6.05 on Thursday and a positive $2.25 for Nov. 30.

Spot December hog futures settled at 82.3 cents per pound, 1.15 cents lower, or down 1.38 per cent. Most-actively traded February finished at 83.475 cents, down 0.975 cents, or 1.15 per cent lower.

Cash, Russia rattle cattle

CME live cattle futures were pulled lower by lower cash cattle prices and the talk that Russia would stop buying U.S. beef and pork, analysts and traders said.

They said packers this week also bought cattle as cheaply as possible to stabilize fallen margins and underpin prices for beef at wholesale.

Cash cattle in Kansas fetched $124 per cwt, down $1 from last week. A small number of Texas cash cattle also moved at $124, compared with trades a week ago at $126 to $128.

There were no live-basis trades in Nebraska on Friday, where sellers priced their animals at $126. Dressed cattle there moved at $197 to $198 versus mostly $200 to $202 last week, a feedlot source said.

Wholesale choice beef on Friday was $192.95/cwt, down $1.18 from Thursday, and select cuts were $172.39, down $1.31, said USDA.

The average beef packer margin for Friday was a negative $62 per head, compared with a negative $58.70 on Thursday and a negative $78.95 for Nov. 30, according to Hedgers Edge.

Some December sellers exited the contract to avoid potential deliveries next week. Funds sold February after it dropped below the 100- and 20-day moving averages of 130.78 and 130.69 cents.

Spot December cattle closed down 0.2 cent/lb., or off 0.16 per cent, to 125.875 cents. February closed 0.625 cent lower, or 0.48 per cent, at 130.4 cents.

CME feeder cattle closed higher as corn prices moved lower, easing feed costs.

January feeder cattle closed up 0.525 cent/lb., or 0.35 percent, at 148.775 cents. March finished at 151.15 cents, up 0.350 cent, or 0.23 per cent.

— Theopolis Waters writes for Reuters from Chicago.

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