Hog and cattle futures end lower on profit-taking - CME

Cash market sets tone for futures market on Monday
calendar icon 6 November 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) hog futures closed lower on Friday, retreating on a round of profit-taking after the benchmark December contract rose to its highest level in a month, reported Reuters.

Soft cash hog values, weaker wholesale pork prices and a large weekly hog slaughter added to bearish sentiment.

"We've had a pretty good rally and (the market) was just due for a pullback," said Doug Houghton, an analyst for Brock Associates.

CME December lean hog futures settled down 1.525 cents at 71.750 cents per pound, retreating after a climb to 73.625 cents, the contract's highest level since Oct. 6. Still, the contract ended the week up 1.8%.

The CME's Lean Hog Index, a two-day weighted average of cash prices, fell to 76.84 cents per pound, its lowest reading since mid-May.

The US Department of Agriculture (USDA) estimated this week's US hog slaughter, including Saturday's projected kill, at 2.677 million head, up 4% from the same period a year ago.

In the wholesale pork market, the government priced pork carcasses on Friday afternoon at $87.28 per hundredweight (cwt), down 13 cents from the previous day.

CME cattle futures fell, with the bellwether December live cattle contract closing below Thursday's low, reversing after posting a two-week high in early moves.

CME December live cattle futures settled down 0.800 cent at 183.875 cents per pound and February ended down 1.200 cents at 185.225 cents.

CME feeder cattle futures faced additional pressure from a rally in CBOT corn futures that signaled higher costs for feed. January feeder cattle settled down 2.425 cents at 239.750 cents per pound.

Cash cattle trade had yet to develop by Friday afternoon, traders said. Feedlots in the southern Plains had been holding out for higher prices after fat cattle changed hands last week at around $185 per cwt.

"Whatever happens in the cash market is going to set the tone for (futures on) Monday morning," Houghton said.

Wholesale beef prices declined. The USDA priced choice cuts of beef on Friday at $302.34 per cwt, down $2.19 from Thursday, and select cuts fell $2.33 at $272.01 per cwt.

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