U.S. livestock: CME live cattle, lean hog futures end higher

Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange (CME) ended higher on Wednesday as expectations of tightening cattle supplies and a setback in grain prices sparked a round of buying, traders said.

The most-active CME live cattle futures, for February delivery, settled up 1.2 cents at 154.25 cents/lb., a day after finding chart support at the contract’s 200-day moving average (all figures US$). The spot December contract rose 0.525 cent to finish at 151.8 cents/lb.

“Fundamentally, both cattle and hogs are still bullish because of our lower supplies,” said Sherman Newlin, an analyst with Risk Management Commodities.

Ahead of the U.S. Department of Agriculture’s monthly Cattle on Feed report due on Friday, analysts surveyed by Reuters on average expected the government to report the number of cattle in U.S. feedlots as of Nov. 1 at 11.745 million head, down 1.7 per cent from a year ago. Analysts on average estimated feedlot placements in October at 2.168 million head, down 3.5 per cent from a year ago.

CME January feeder cattle settled up 0.45 cent at 177.475 cents/lb., rebounding a day after dipping to a four-week low.

Cattle futures had sunk on Tuesday as grain prices climbed, signaling potentially higher costs for livestock feed. But corn, wheat and soy futures retreated on Wednesday, helping cattle futures to firm.

Traders shrugged off pressure from declining wholesale beef prices. Choice cuts fell $1.27, to $257.09 per hundredweight (cwt), while select cuts fell by 41 cents at $231.35/cwt, according to USDA data.

Cash cattle traded lightly in Kansas and the Texas Panhandle at $150/cwt, steady with last week, USDA reported.

CME lean hog futures inched higher for a third straight session on expectations of tightening hog supplies and optimism about pork demand from China.

CME December lean hog futures settled up 0.25 cent at 85.575 cents/lb. Most-active February hogs ended up 0.275 cent at 90.35 cents after reaching 90.725 cents, a three-week high.

An active hog slaughter pace was supportive. Meatpackers slaughtered an estimated 493,000 hogs on Wednesday, up from 476,000 head a week ago, USDA said. The cattle slaughter totaled 129,000 head, steady with a week ago.

Traders await Thursday’s weekly USDA export sales report which will detail sales of U.S. pork and beef in the week ended Nov. 10.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.