Chicago | Reuters — Chicago Mercantile Exchange live cattle and lean hog futures ended mixed on Wednesday as traders squared positions ahead of two key U.S. government reports due on Thursday, traders said.
The U.S. Department of Agriculture is scheduled to release its monthly cattle on feed report and its quarterly hogs and pigs report at 2 p.m. CT on Thursday.
The reports are expected to show higher on-feed cattle supplies and lower placements, and a growing U.S. hog herd, according to an average of analyst estimates gathered ahead of the data.
“The primary feature to the futures trade today was that we were trading on both sides of the market ahead of the hogs and pigs and the cattle on feed reports,” said Mike Zuzolo, president of Global Commodity Analytics.
“There are questions about how big the hog herd is, especially the kept-for-breeding number, with estimates of 103 or 104 per cent. That’s a surprise given that hog profitability hasn’t been all that great,” he said.
Declining cash hog prices have weighed on the futures market as hogs in the closely followed Iowa and southern Minnesota market traded $1.08/cwt lower on Wednesday, declining for a third straight day (all figures US$).
Weak pork prices also overshadowed lean hog futures. The hog carcass cutout value fell by $2.23/cwt on Wednesday, according to USDA data.
The most active CME February hog futures contract ended up 0.05 cent at 62.7 cents per pound, closing near its 200-day moving average. Deferred contracts were up 0.225 cent to down 0.4 cent.
CME February live cattle fell 0.325 cent and settled at 122.25 cents/lb. Deferred contracts were mostly firmer.
Cash cattle markets in the U.S. Plains remained quiet, with prices this week not expected to rise much above last week’s $118-$119/cwt sales.
Feeder cattle futures were mostly lower, closing near session lows as prices followed late-session declines in live cattle. But weaker corn feed prices limited declines.
CME January feeder cattle futures ended unchanged at 146.2 cents while March futures were down 0.025 cent at 144.275 cents.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.