October lean hog markets dip - CME

Cattle markets hit contract highs on tight supplies
calendar icon 18 September 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) live cattle futures scaled to life-of-contract highs on Friday on firmer cash market prices and tight supplies of market-ready animals, Reuters reported, citing traders.

Feeder cattle futures also posted contract highs across the board, drawing additional support from weaker feed corn prices.

Feedlot cattle in the central and southern US Plains traded at higher prices this week, according to traders and US Department of Agriculture (USDA) data. Average prices ranged from mostly $183 per cwt in southern areas to $184 to $185 further north, both up from a week ago.

"We've seen some stronger cash trade and that's the main reason futures are up," said Austin Schroeder, analyst with Brugler Marketing & Management.

"Slaughter-ready cattle numbers are still fairly tight and that's giving feedlots a little bit of leverage to push the cash higher," he said.

October live cattle hit a contract high of 187.300 cents per pound and ended up 1.450 cents at 185.475 cents per pound. Actively traded December settled 1.475 cents higher at 191.825 cents after reaching a life-of-contract high of 192.000 cents.

October feeder cattle rallied to a contract high of 264.675 cents per pound and finished up 2.600 cents at 264.475 cents per pound.

Traders are looking ahead to the monthly USDA Cattle on Feed report at the end of next week.

Lean hog futures were mixed, guided by technical trading and underpinned by the spot contract's discount to the CME lean hog index.

CME October lean hogs dipped 0.225 cent to 83.125 cents per pound, below the latest index .IHX of 86.94. The contract held in a narrow range above its 50-day moving average and below its 200-day average.

December hogsU, the most active contract, held chart support at its 50- and 100-day moving average and settled unchanged at 75.100 cents per pound.

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