5 December 2023

2 minute read

By: Global Ag Media

North America

Live cattle futures on the Chicago Mercantile Exchange (CME) tumbled on Monday for a third straight session, with the benchmark February contract hitting its lowest since January 2023 on technical-selling worries over beef demand, Reuters reported, citing traders.

Wholesale prices for choice cuts of beef fell to their lowest since mid-November.

"The market is searching for any positive news, whether it's on the demand side or the supply side, and not finding it," said Altin Kalo, agricultural economist for Steiner Consulting.

"It seems to me that the market is pricing a much weaker demand environment for 2024 than it was even three months ago," Kalo said.

CME February live cattle settled Monday down 2.050 cents at 167.075 cents per pound. Spot December futures ended 2.025 cents lower at 167.250 cents, widening their discount to the cash market, which traded last week at mostly $175 per hundredweight (cwt), equivalent to 175 cents per pound.

CME January feeder cattle fell 3.900 cents to settle at 210.525 cents per pound.

Managed commodity funds still hold a modest net long position in CME live cattle futures of 32,691 contracts, leaving the market vulnerable to additional long liquidation. But the funds have whittled that net long down from 103,763 contracts two months ago.

The US Department of Agriculture (USDA) priced choice cuts of beef on Monday at $294.99 per cwt, down $2.47 from Friday and the lowest since Nov. 17. Select cuts fell $2.66 at $262.83 per cwt. The government reported Monday's cattle slaughter at 125,000 head, up from 123,000 a week ago and matching the year-ago kill.

CME lean hog futures ended mostly higher, with most-active February hogs up 0.700 cent at 70.800 cents per pound. Deferred contracts also closed higher, but the spot December hog contract fell 0.550 cent to settle at 68.050 cents per pound.

The USDA priced pork carcasses on Monday afternoon at $84.43 per cwt, up 88 cents from Friday.