Cattle futures firm, December hogs ease - CME

High prices have curbed US exports to China
calendar icon 6 December 2022
clock icon 2 minute read

Feeder cattle futures on the Chicago Mercantile Exchange (CME) firmed for the fifth consecutive session, as corn, a significant input for producers, continues to fall, Reuters reported, citing traders.

"The feeders have sort of been hobbled for a long time because of the elevated feed price," said Dennis Smith, livestock analyst and broker at Archer Financial Services. "The market's anticipating continued strength in the feeder cattle market, moving forward."

Most-active CME January feeder cattle added 1.325 cents to 183.775 cents per pound.

CME benchmark February live cattle eased 0.050 cent to 155.825 cents per pound, while the spot December contract slipped 0.125 cent to 153.225 cents per pound.

Several life-of-contract highs were notched for next summer and fall, including June, August and October live cattle futures contracts.

Strength in the cash cattle market continues to support live futures, with northern US plains cattle trading from $157 to $159 per hundredweight (cwt), while the southern plains saw firmer trade as high as $156 per cwt late last week, the US Department of Agriculture said.

Boxed beef prices fell significantly on Monday, with choice cuts losing $6.62 cents to $243.31 per cwt. Choice cuts have fallen more than $10.00 since Wednesday, Nov. 30, according to USDA data. Select cuts lost $3.45 cents to $221.11 per cwt on Monday.

Meanwhile, CME February lean hogs added 0.100 cents to 90.525 cents per pound, after climbing to 91.900, its highest since Sept. 21.

Nearby December hogs eased 0.350 cent to 82.075 cents per pound.

Further easing of COVID-19 quarantine rules in some Chinese cities could increase demand for US commodities, traders said.

China is one of the biggest consumers of US pork, though recent high prices have curbed US exports to the country, Smith noted.

"As we do the math, we just don't think the US pork is cheap enough to go to China," Smith said.

China is set to announce the further easing of its pandemic-related curbs as early as Wednesday, sources told Reuters.

The CME's lean hog index, a two-day weighted average of cash hog prices, fell 37 cents to $82.87 per cwt, its lowest since Jan. 28.

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