Glacier FarmMedia COVID-19 & the Farm

U.S. livestock: Live cattle slide on end-month profit-taking

Firm pork prices support CME lean hogs

cme april live cattle
CME April 2021 live cattle with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. live cattle futures closed lower on Friday as traders booked profits at the end of the week and month, and as Wall Street equity markets declined, traders said.

Lower-than-expected cash cattle trades added to bearish sentiment. Market-ready cattle traded in the cash market as high as $113/cwt, traders said, up $3 from the bulk of last week’s trade at $110.

However, the price was lower than some had expected, given robust packer margins and a steady climb in wholesale beef prices throughout the month of January.

“The cash (cattle trade) is not as strong as we were hoping, based on the strength in the beef. You tie that in with the selling in the stock market, and the rest was technicals taking over,” said Dan Norcini, an independent livestock trader.

Chicago Mercantile Exchange April live cattle settled down 0.85 cent at 121.85 cents/lb. (all figures US$). For the month of January, the contract rose 2.6 cents, or 2.2 per cent, inviting profit-taking by speculators.

Feeder cattle futures sagged as corn futures roared to fresh 7-1/2 year highs, signaling higher feed costs. CME March feeder cattle ended down 2.075 cents at 137.725 cents/lb.

Beef prices continued to march upward. Choice cuts of beef rose $1.96, to $233.95/cwt, and select cuts were up $1.82 at $222.70, according to the U.S. Department of Agriculture.

CME hog futures closed mostly higher, supported by firm pork prices and expectations for continued strength this spring. April lean hog futures settled up 0.275 cent at 76.65 cents/lb., hovering just below a life-of-contract high set on Tuesday at 77.6 cents.

Wholesale pork prices rose, with the U.S. pork carcass value rising $1.87 at $85.36/cwt on Friday afternoon, according to USDA.

The CME’s thinly traded pork cutout futures closed higher, with the April contract settling up one cent at 84.8 cents/lb., reflecting expectations for pork prices to remain firm.

“It will be hard to break the hog market down in those spring and summer months, if the carcass (value) is strong,” Norcini said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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