U.S. livestock: Cattle rise, lean hogs mixed

Chicago lean hog futures ended Tuesday mixed while cattle made gains.

Most-active February lean hog contracts closed down 0.475 cents at 85.675 cents a pound. April futures gained 0.075 cents to settle at 91.575 cents per pound.

The USDA reported pork carcass cutout value at $91.25 per cwt on Tuesday afternoon, down $2.59.

Most-traded February live cattle futures gained 0.750 cents to close at 236.625 cents a pound. April contracts settled at 237.375 cents a pound, up 0.575 cents.

Most-active March feeder cattle closed at 359.025 cents a pound, up 3.450 cents. April contracts gained 3.225 cents a pound to settle at 358.125 cents per pound.

Choice boxed beef fell by $2.45 to $351.25 per cwt. Select beef was priced at $351.08 per cwt, down $0.42.

Analyst Christopher B. Swift noted the narrow spread between March feeders and August fats.

“Cattle feeders have gone from inhaling negative margins to gulping them down at 3 to 1 ratio’s daily for close to two weeks now.  This is a difficult scenario to figure out,” he wrote.

“Beef production continues to be rationed at the consumer level with historical highs for fresh beef. Packers have already made moves to increase efficiency with the closing of slaughter and secondary processing plants,” wrote analyst Christopher B. Swift. “Restaurants and grocers have just now started to see a reduction in negative margins with the lower box price.”

Meanwhile, cattle feeders aren’t reducing pen space. He suggested some may be stockpiling cattle in hopes of future high prices.

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