Chicago | Reuters — U.S. livestock futures were mostly higher on Wednesday, with cattle buoyed by expectations for gains in cash markets while hogs climbed on short covering after staying above Monday’s six-week lows, traders and analysts said.
Prices for both cattle and hogs moved in relatively narrow ranges on the Chicago Mercantile Exchange (CME) in light-volume trading following the Christmas Day holiday on Tuesday.
A winter storm moving through parts of the U.S. Plains including Nebraska was likely to result in heavy accumulation of snow, muddying cattle feedlots and potentially limiting what feeders would make available for beef packers. The risk of storm-related disruptions, coupled with higher beef prices, could entice packers to pay up for cattle.
However, packers also will slaughter fewer animals this week due to holiday closures. That could limit demand and cap gains in cattle prices.
“With the short kill week, and winter weather moving in, more people are battening down that hatches instead of getting ready to move animals to market,” said Matthew Wiegand, a Nebraska-based broker at FuturesOne.
CME February live cattle settled down 0.025 cent at 122.75 cents/lb. after earlier hitting a peak of 123.5 cents, the highest since Oct. 29 (all figures US$). The April contract reached a contract high of 125.6 cents before settling at 125.25 cents, up 0.025 cent.
CME January feeder cattle finished up 0.725 cent at 148.1 cents/lb., supported in part by a steep drop in corn futures. Feeders often move in the opposite direction of corn futures, since lower corn prices reduce costs to fatten cattle.
CME February lean hog futures were up 0.075 cent at 60.375 cents/lb. and April hogs up 0.1 cent to 67.2 cents.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.