Feeder cattle futures climb on firm cash markets - CME
Hog markets end lower
20 November 2024
2 minute read
By: Chicago Mercantile Exchange (CME) cattle futures rose on Tuesday, reflecting firm cash values for feeder cattle and a bounce in wholesale beef prices, Reuters reported, citing brokers.
Benchmark CME February live cattle futures settled up 2.025 cents at 188.000 cents per pound, pushing through chart resistance at its 50- and 20-day moving averages. Front-month December cattle rose 2.475 cents to 186.575 cents.
Feeder cattle futures surged as well. The January contract finished up 2.500 cents at 252.000 cents per pound after reaching 252.450 cents, its highest level since July 31.
Drought has receded in the US Plains this month, calming fears that had prompted ranchers to speed calves to feedlots to be fattened on grain.
"The rains a week and a half ago have eased concerns about drought, and therefore we are not going to see as many heifers being pushed into the feedlots," said Rich Nelson, chief strategist at Allendale Inc.
In the wholesale beef market, the US Department of Agriculture priced choice cuts of boxed beef on Tuesday afternoon at $308.79 per hundredweight (cwt), up $1.51 from Monday. But select cuts fell by $3.54 to $271.91 per cwt.
Fund-driven buying may have added support. Managed commodity funds have been adding to their net long position in CME live cattle futures since mid-September and had established their largest net long since July 2023 in the latest weekly commitments report from the US Commodity Futures Trading Commission.
CME hog futures closed mostly lower on Tuesday, with most-active February lean hogs settling down 0.400 cent at 82.875 cents per pound. Front-month December hogs finished down 0.475 cent at 79.550 cents.
However, both contracts were below the CME's Lean Hog Index, a two-day weighted average of cash prices, which was last reported at 88.49 cents. The fact that futures are cheaper than cash hogs could help underpin the market, Nelson said.
The USDA priced pork carcasses on Tuesday afternoon at $94.68 per cwt, down $2.39 from Monday.
