Cattle hog futures end mostly lower - CME

Risk-off environment has traders worried
calendar icon 11 October 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) live cattle futures surrendered early-session gains and ended mostly lower on Tuesday, as technical selling and concerns about beef demand weighed on the market, reported Reuters.

Feeder cattle ended mixed after trading within a recent narrow range as traders assessed inflationary and geopolitical risks and any potential impact on consumer spending.

"We are in this risk-off environment that makes us worry about demand for beef going forward ... It doesn't really feel like the correction in cattle is over," said Ted Seifried, chief market strategist for Zaner Ag Hedge.

"The strength in the stock market is a good reason for why cattle stabilized. But the fact that we haven't been able to go higher is a bit disappointing."

CME December live cattle fell 0.350 cent to settle at 185.000 cents per pound. The benchmark contract was sandwiched between support at its 100-day moving average and overhead technical resistance at its 50-day moving average.

November feeder cattle gained 0.700 cent to end at 250.350 cents per pound, while actively traded January settled unchanged at 251.850.

Poor beef packer margins and softer wholesale beef prices hung over the market, although beef demand seasonally tends to rise in October into November.

The US Department of Agriculture reported the choice boxed beef cutout at $301.06 per cwt on Tuesday, down $2.36 from a day earlier.

The average beef packer margin improved on Tuesday but remained at negative $38.10 per head, up from negative $53.15 a week earlier, according to livestock marketing advisory service

CME lean hog futures were mostly lower on technical selling and concerns about pork demand.

Actively traded December hogs fell 1.050 cents to 71.425 cents per pound. The contract failed to breach overhead chart resistance at its 20-day moving average and a downward trend line traced from a mid-September high.

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