Glacier FarmMedia COVID-19 & the Farm

U.S. livestock: Cattle rise on firm cash market, harsh Plains weather

Pork prices, hog supplies drag on hog futures

cme april cattle
CME April 2020 live cattle with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. live cattle futures climbed to the loftiest levels of the week on Friday on expectations for higher cash cattle sales at Plains feedlot markets and as harsh weather in parts of the region increased stress on the animals.

Some feedlot cattle in the central and northern Plains have traded at prices steady to firmer than a week ago, while cattle in the southern Plains were expected to trade later on Friday at least $1 per cwt higher than last week’s sales of mostly $124/cwt, traders said (all figures US$).

Seasonally tight inventories of cattle have elevated the market in recent weeks despite thinning beef packer margins. Facing strong beef demand and tightening supplies of cattle, beef packers have been buying cattle more aggressively so as not to run short.

The wholesale choice boxed beef cutout value rose eight cents to $210.04/cwt on Friday, up $1.55 from a week ago, according to the U.S. Department of Agriculture. Select cuts were $206.55/cwt, down 13 cents on the day but up $1.16 from a week ago.

Average beef packer margins widened slightly to $7.40 per head on Friday, up from $3.15 per head a day earlier, according to livestock marketing advisory service HedgersEdge.com LLC.

But margins have fallen sharply from recent highs. They were at $145.45 per head a month ago and more than $360 per head two months ago, according to HedgersEdge data showed.

Meanwhile, plunging temperatures, snow and ice are stoking concerns about slowed weight gains in cattle, traders said.

Chicago Mercantile Exchange February live cattle rose 0.7 cent to 127.425 cents/lb., the contract’s highest close since Dec. 13. April cattle were up 0.65, at 127.95 cents.

Feeder cattle followed live cattle higher, with actively traded March futures up 0.9 cent at 147.45 cents/lb.

CME lean hog futures ended mixed as the market weighed weaker pork prices and ample supplies of hogs against an expected increase in pork exports to China as part of an interim U.S.-China trade deal due to be signed next week.

The deal is expected to accelerate Chinese buying of U.S. pork as part of what the White House says is a vow by Beijing to roughly double U.S. farm goods purchases from levels seen before the trade war broke out in 2018.

CME February hogs rose 0.225 cent to 67.25 cents/lb. while April futures fell 0.35, to 74.125 cents.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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