Chicago | Reuters — Chicago Mercantile Exchange cattle futures edged lower on Friday to snap a five-session climb, pressured by technical selling and uncertainty about cash price direction, given that cash cattle did not trade ahead of the closing bell, brokers said.
However, after the futures market closed, fed cattle traded lightly in cash markets in Kansas, Texas and Nebraska at $123/cwt, $3 higher than a week ago — a bullish factor for the resumption of futures trade on Monday (all figures US$).
“Obviously futures were disappointed by the lack of cash trade,” said Rich Nelson, chief strategist for Allendale Inc.
CME February live cattle futures settled down 0.05 cent/lb. at 121.9 cents. April ended down 0.75 cent at 122.725 cents.
Cash cattle were bid at $118 as recently as Friday morning, but bids rose to $122 later in the day with trades following at $123.
Analysts attributed the higher cash price to expectations of rising consumer spending, forecasts for a winter storm in the Plains early next week that could slow the transport of animals, and robust weekly U.S. beef export sales data. The U.S. Department of Agriculture reported export sales of U.S. beef in the latest week at 15,000 tonnes.
“Weekly beef export sales were very strong, 37 per cent above the five-year average for this particular week. So (there was) just a litany of small good stories,” Nelson said.
CME feeder cattle futures declined, following live cattle futures, with most-active March feeders down 1.575 cents/lb. at 145.6 cents.
Lean hogs lower
CME lean hog futures declined on weaker cash prices, traders said. Packers were able to pay less for hogs due to rising temperatures in the Midwest that have eased the movement of animals from farms to processing plants, following a bout of wintry weather earlier this week.
Lean hogs in the top cash market of Iowa and southern Minnesota were down 36 cents/cwt from a day earlier, according to USDA data.
CME February hogs settled down 0.975 cent/lb. at 72.075 cents and April ended 0.4 cent lower at 75.5 cents.
Sell-stops and technical selling contributed to weakness in lean hog futures. Traders noted a gap in the chart for February contract between the Jan. 12 high of 71.825 cents and Friday’s low of 72 cents, which could act as a magnet for futures next week.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Theopolis Waters.