U.S. livestock: Cattle weaken on profit-taking, hogs firmer

CME February 2019 live cattle with 100-day moving average. (Barchart)

Chicago | Reuters — U.S. live cattle futures finished slightly lower on Monday as traders locked in profits in end-of-year position squaring, after prices earlier touched contract highs, traders said.

Lean hog futures were mostly higher, buoyed by short-covering and position squaring on the final trading day of the month, quarter and year.

Cattle futures climbed for much of last week due to harsh winter weather in the U.S. Plains that muddied some feedlots, hampered shipments of animals and slowed weight gains as temperatures dropped.

The weather issues contributed to higher prices in cash cattle markets, with slaughter steers fetching about $123/cwt in trades after futures markets were closed on Friday (all figures US$). The U.S. Department of Agriculture pegged volume of cattle traded in the cash cattle market last week at 86,273 head, up from 82,546 the previous week and 77,624 a year ago.

Midwest Marketing Solutions broker Brian Hoops said that with the storms moving out of the region, beef packers might not have to bid as aggressively to buy cattle.

“The forecasts are a little better this week, so we probably will not get that push,” Hoops said.

Most-active Chicago Mercantile Exchange February cattle settled down 0.3 cent to 123.875 cents/lb., after earlier reaching a contract peak of 124.95 cents.

Cattle on a continuous chart climbed 1.5 per cent for the year, the second straight annual gain.

“We pushed to some new highs in cattle and faded back,” Hoops added.

Feeder cattle futures also eased on Monday, giving back a small portion of recent gains. Most-active March feeders were down 0.125 cent, to 146.75 cents/lb. Feeder futures for the year were about two per cent higher.

Meanwhile, hog prices were firmer in technically-driven trade after declining for much of the last week.

February lean hog futures settled up 0.325 cent, at 60.975 cents/lb.

Hogs on a continuous chart lost about 15 per cent for the year, under pressure from record-large U.S. supplies and trade wars that impeded American pork exports to top markets including Mexico and China.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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