US lean hog futures ease - CME
Live cattle futures slightly down
1 February 2023
2 minute read
By: US live cattle futures climbed to new contract highs early in the session before settling slightly lower on Tuesday, as traders assessed US cattle inventory levels ahead of the US Department of Agriculture's biannual report, reported Reuters.
After the market closed, the USDA reported that the US beef cow herd dropped to 28.9 million head, its lowest level since 1962, after a severe drought that raised costs for livestock feed across the US Plains.
"Even though feeder cattle prices are quite high, it's the uncertainty around feed supply and drought conditions. It's hard to make the investment, if you're not sure how weather is going to play out or if you're going to have the grass available to support those heifers," said Alton Kalo, economist at Steiner Consulting Group.
Heifers retained for beef cow replacement fell to 5.16 million head, down 6% from a year ago.
CME February live cattle firmed 0.100 cents per pound to 158.850 cents per pound.
The most-active April contract eased 0.325 cents to 163.025 cents per pound, after notching a life-of-contract high of 163.575 cents per pound.
CME March feeder cattle futures gained 2.225 cents to settle at 186.150 cents per pound.
Cattle slaughter was strong to start the week, with 127,000 head processed, up 4,000 head from the same period in 2022, the USDA said.
US lean hog futures eased on Tuesday, pressured by stronger supplies of market-ready hogs, Kalo said.
February lean hog futures eased 0.275 cent to 74.875 cents per lb, while most-active April hogs slipped 0.100 cent to 86.425 cents per lb.
"We continue to see more hogs come to market than people expected," said Kalo.
Hog processors slaughtered 483,000 head on Tuesday, the USDA said, up 5,000 head from the same period in 2022.
The CME's Lean Hog Index, a two-day weighted average of cash hog prices, added 7 cents to 72.71 per cwt.
