Chicago | Reuters — Chicago Mercantile Exchange live cattle futures gained on Monday, as the cash market strengthened and packers looked to pickup slaughter rates, brokers said.
Feeder cattle also gained, while lean hog futures added as producers looked to offload market-weight animals early to reduce feed costs.
CME October live cattle added 0.7 cent to end at 107.95 cents/lb. (all figures US$).
CME October lean hog futures settled 2.85 cents higher at 53.825 cents/lb., while September feeder cattle added 0.275 cents to end at 145.4 cents/lb.
While heavier slaughter weights continue to indicate a backlog of cattle and hogs, brokers reported indication that packers may be seeing supply trim.
“All the packers were out and about buying in cash negotiation country last week,” said Scott Varilek, broker at Kooima + Kaemingk Commodities. “Maybe they don’t have as many cattle around them as they’re letting on.”
The U.S. Department of Agriculture estimated Monday’s cattle slaughter at 117,000 head, up 3.5 per cent from a week ago. An estimated 482,000 hogs were slaughtered, 15 per cent more than the 420,000 a week prior.
Varilek said there’s indication producers are sending hogs with less weight, to cut down on feed expenses.
“Why keep feeding them, keep losing money?” he said. “I think the weights are coming down a little bit, and guys are moving hogs a little quicker.”
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.