Lean hog futures strengthen amid supply concerns - CME

Ukraine-Russia conflict roils grain markets
calendar icon 3 March 2022
clock icon 2 minute read

Chicago Mercantile Exchange (CME) feeder cattle futures rose on Wednesday, and live cattle futures prices slipped for another session, as Russia's invasion of Ukraine continued to send agricultural commodity markets into a tailspin, traders said.

But a whipsaw in prices for grains used for livestock feed weighed on the day's livestock complex, traders said.

"We're all really just along for the ride on live cattle right now," said Don Roose, president of agricultural broker US Commodities. "You just can't continue to feed $7.25 corn to $1.60 feeder cattle and sell them it at $1.40."

Chicago Board of Trade corn and wheat futures fluctuated wildly on Wednesday in volatile trading, fueled by the Ukraine crisis, reported Reuters.

Wheat rose sharply against corn and soybeans as traders appeared to be exiting long corn/short wheat and long soy/short wheat spread positions, analysts said.

March feeder cattle rose 2.025 cents to 158.300 cents per pound, while April feeders rose 3.2 cents to 163 cents per pound.

April live cattle ended 0.425 cent weaker at 140.100 cents per pound.

Prices were mixed on beef shipped to wholesale buyers. On Wednesday morning, choice boxed beef cutout value was $1.05 lower at $255.63 per cwt, but the select cutout was up 58 cents at $252.10 per cwt, the US Department of Agriculture (USDA) said.

CME lean hog futures strengthened amid ongoing supply concerns, traders said.

Hog futures also are being boosted by investors hungry for a safe haven as equity markets amid geopolitical and monetary policy concerns, said Karl Setzer, a market analyst with Agrivisor.

"There's a lot of managed money out there right now, and they don't know where to put that money," Setzer said.

Meatpackers slaughtered an estimated 481,000 hogs on Wednesday, up from 473,000 hogs a week ago, but down from 496,000 hogs a year ago, the USDA said.

April hog futures closed 0.1 cent higher at 106.300 cents per pound, while June hogs ended down 0.325 cent at 116.45 cents per pound.

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