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U.S. livestock: CME live cattle futures up slightly

CME February 2019 live cattle, with 20-day moving average. (Barchart)

Chicago | Reuters — U.S. cattle futures closed modestly higher on Friday on short-covering after a four-session slide and concern that wintry weather in the central Plains in the coming days could slow cattle weight gain, traders said.

Lean hog futures were mixed as traders awaited news on U.S.-China trade talks expected this weekend as part of the G20 summit in Argentina.

A winter storm in the Plains is expected to drop 12-18 inches (76 cm) of snow in north-central Nebraska over the weekend, with six to 10 inches in northwest Iowa and southern Minnesota, Radiant Solutions agricultural meteorologist Kyle Tapley said.

Temperatures were expected to drop next week in the storm’s wake, with temperatures below 0 F (-18 C) possible in the Dakotas late next week, Tapley said.

“That should cause problems with the animals holding onto weight. People are anticipating weight loss, another positive for the futures,” one livestock trader said.

Chicago Mercantile Exchange February live cattle futures settled up 0.225 cent at 120.5 cents/lb. (all figures US$).

Expectations of firmer cash cattle trade lent support, although bids and offers were far apart during the trading session. Packer bids were around $112/cwt on cattle offered at $120.

Feeder cattle futures fell, with the January contract down 0.75 cent at 145.225 cents, pressured by rising CBOT corn futures and a drop in the CME feeder cattle index, traders said.

Lean hog futures closed mixed, with the benchmark February contract gaining against April and June on spreads.

CME February hogs settled up 0.2 cent at 67.55 cents/lb. while front-month December fell 0.85 cent at 57.875 cents.

Traders continued to digest Thursday’s USDA weekly export sales report, which showed China buying U.S. pork for 2018 and 2019. Analysts said the sales suggested that an outbreak of African swine fever in the world’s top hog producer is raising fears of an eventual supply shortfall.

Traders were also squaring positions ahead of the trade talks in Argentina.

“I think everyone is taking a pause (ahead of the G20 meetings). Especially for hogs, there is a stake there from China’s pork tariffs,” said Doug Houghton, analyst with Brock Associates Inc.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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