Cattle futures rally on technicals, rising beef prices - CME
Lean hog futures end lower
7 February 2024
2 minute read
By: Chicago Mercantile Exchange (CME) cattle futures rallied on Tuesday on tight supplies and rising beef prices, extending a steady climb from multi-month lows posted in early December, Reuters reported, citing traders.
Technical buying helped to accelerate gains, sending the benchmark April live cattle contract to its highest point in three months.
"This market is being driven by the cash market. The beef prices were stronger at midday," analyst at Brock Associates, Doug Houghton said.
"When we took out the highs from yesterday, it certainly spurred some technical buying. April cattle went flying through their 200-day moving average," he added.
April live cattle ended 3.725 cents higher at 186.075 cents per pound, its highest close since Nov. 3. March feeder cattle rose 3.925 cents to 246.675 cents per pound.
The US Department of Agriculture (USDA) at midday said the choice boxed beef cutout was up $2.24 to $295.72 per cwt, while select cuts gained 43 cents to $284.20 per cwt.
Strong asking prices for cash feedlot cattle in the southern US Plains added to the futures market's stronger tone, as did tight supplies of cattle, Houghton added.
Harsh winter weather last month appears to have slowed cattle weight gains, which is now limiting marketings, he said.
CME lean hog futures ended lower for a second straight session, pressured by ample supplies and lower pork prices.
CME benchmark April lean hog futures settled down 0.950 cents at 81.250 cents per pound.
The USDA quoted pork carcass cutout value on Tuesday at $86.23 per cwt, down $1.37 from the previous day and a 3-1/2 week low.
Stronger-than-anticipated hog slaughter rates this week could keep pressure on the pork market.
The USDA estimated Tuesday's daily hog slaughter at 492,000 head, up 17,345 head from the same day last year.
