April lean hogs advance - CME

Feeder cattle climb to another contract high
calendar icon 8 March 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) feeder cattle futures reached a contract high for a second consecutive session on Tuesday, while live cattle futures retreated from a contract high set a day earlier, Reuters reported, citing brokers.

Reduced US herd sizes due to drought have propelled futures higher recently, though some brokers said supply concerns have somewhat been dialled in to the markets for now.

Easing corn futures also underpinned the feeder cattle market by signalling cheaper prices for livestock feed, brokers said.

A combination of "weak corn futures, weak corn basis and tighter-trending supplies" of cattle are supportive for feeder cattle, broker StoneX wrote in a note.

"Some empty pens are starting to show up," the firm said.

CME April feeder cattle futures finished 0.075 cent higher at 198.675 cents after touching a contract high of 199.400 cents.

April live cattle closed 0.125 cent weaker at 165.975 cents per pound after rising on Monday to a high of 166.675 cents.

Wholesale beef prices were mixed. Choice cuts pulled back $2.27 to $287.93 per cwt, while select cuts rose $1.02 to $277.49 per cwt, the US Department of Agriculture (USDA) said.

The USDA estimated meatpackers slaughtered 127,000 cattle, up from 126,000 cattle a week ago and 124,000 cattle a year earlier. Packers killed an estimated 485,000 hogs for meat, unchanged from last week and up from 480,000 hogs a year earlier, the department said.

CME April lean hogs advanced 1.325 cents to settle at 84.800 cents per pound. Deferred hog contracts stumbled.

The USDA on Wednesday will provide an update on meat and grain supplies and demand in a monthly report.

In Brazil, the government expects to resume beef exports to China in the next few days and is planning to request a revision of the protocol that triggered a ban after Brazil discovered a case of mad cow disease, a government official said.

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