Chicago | Reuters — U.S. live cattle futures notched new contract highs for the third consecutive session on Wednesday before the rally fizzled out.
Traders were searching for fresh news to push up prices after factoring in concerns about cold weather and snow in the central U.S. slowing weight gain in herds and disrupting shipments of livestock to processing plants.
The wintry weather fueled worries about a temporary tightening of supplies that helped lift prices recently.
During the weekend and early next week, a strong surge of cold air will engulf the Plains and Midwest, according to a forecast from the U.S. Department of Agriculture. Cattle typically do not gain weight as quickly in cold weather because they consume feed to generate body heat.
“We’re going to need some news to get this thing moving higher,” a cattle trader said.
Most-active Chicago Mercantile Exchange April live cattle ended flat at 129.925 cents/lb. after setting a contract high of 130.1 cents/lb. (all figures US$).
That topped Tuesday’s contract high of 130 cents, which was a price that some traders had been waiting for to liquidate positions, a trader said.
March feeder cattle futures gained 0.425 cent, to 143.875 cents/lb.
Choice-grade boxed beef was down 21 cents, to $219.46/cwt, and select-grade boxed beef fell 94 cents, to $212.79/cwt, according to U.S. Department of Agriculture data issued after the close of trading.
“It’s not going to jump the market, at least on the open,” a trader said about the declines in boxed beef prices.
CME April lean hogs, the front-month and most actively traded contract, slipped 0.125 cent to 55.6 cents/lb.
Wholesale pork prices, known as the cutout, also slumped. The carcass value was $59.57/cwt, down $1.39 from Tuesday, according to USDA.
China, the world’s top hog producer and pork consumer, plans to divide its pig industry into five zones in an attempt to halt the spread of African swine fever.
U.S. swine veterinarians said Beijing will likely need to take more steps to control the disease, which is fatal to pigs but not harmful to people.
China has reported more than 100 outbreaks in 28 provinces and regions since last August, causing turmoil in the $1 trillion industry and related sectors.
— Tom Polansek reports on agriculture an ag commodities for Reuters from Chicago.