Chicago | Reuters –– U.S. live cattle futures finished mixed after touching a new contract high on Thursday, as concerns about cold weather tightening supplies underpinned prices.
Forecasts for more cold, snowy weather in the middle of the country kept traders on edge after recent storms slowed transportation and weight gain in herds. Cattle typically do not put on weight as quickly in cold weather because they consume feed to generate body heat.
“These cattle are still going to be fighting winter conditions well approaching the middle part of March,” said Dennis Smith, a commodity broker for Archer Financial Services in Chicago.
Most-active Chicago Mercantile Exchange April live cattle settled down 0.075 cent at 129.85 cents/lb., after setting a contract high of 130.1 cents/lb. on Wednesday (all figures US$). The contract traded just below its high, reaching 130.05 cents on Thursday, and ended above its session low of 128.9.
June live cattle ended flat at 120.15 cents/lb. and reached a contract high for a fourth consecutive session.
“The market closed pretty strong even though it’s unchanged to slightly lower,” Smith said.
March feeder cattle futures lost one cent to 142.875 cents/lb.
Feeder cattle futures may come under light pressure on Friday from a U.S. Department of Agriculture report that was issued after the closing of trading on Thursday and showed an increase in the size of the nation’s calf herd, Smith said.
There were 94.8 million cattle and calves in the U.S. as of Jan. 1, up from 94.3 million a year earlier, according to USDA’s semi-annual cattle inventory report.
Beef cows, at 31.8 million head, were up one per cent from a year ago. The 2018 calf crop was estimated at 36.4 million head, up two per cent from the previous year.
“We’ll be well supplied with cattle this year on the feedlot side,” said Rich Nelson, chief strategist for Illinois-based broker Allendale.
In the swine market, CME April lean hogs, the front-month and most actively traded contract, rose 0.275 cent to 55.875 cents/lb. The contract has recovered slightly since hitting a low of 52.25 cents last week on concerns about large hog herds and low pork prices.
“Oversupply remains the driving force,” Nelson said.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.