The DPL determines how much a contract can move in a given session above or below the previous settlement. The new level compares with the current limit of $50 per day.

The DPL will no longer apply to an expiring futures contract starting on the last trading day prior to the first notice day of the contract. For the November 2021 futures contract, the DPL will no longer apply starting Thursday (Oct. 28).

The rules governing the ICE canola futures see that the daily limits are adjusted twice a year, at the beginning of May and the beginning of November.

For this upcoming adjustment, the limit was calculated as seven per cent of the average of the settlement prices for the January 2022 contract for a 45-day trading period ended Oct. 15, rounded to the nearest $5.

The next change to the DPL will be effective May 1, 2022, and will be based off of average settlement prices for the July 2022 contract ahead of that adjustment.

Full details of the ICE canola contract specifications can be found here.

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Wheat followed the weaker trend, with seasonal pressure noted from the U.S. winter wheat harvest.

Chicago Board of Trade July corn settled down its 40-cent daily limit at $6.33 per bushel (all figures US$). CBOT July soybeans ended down 118-3/4 cents at $13.29-3/4 per bushel while new-crop November soybeans fell 90-1/2 cents to $12.52-3/4, dropping below psychological support at the $13 mark for the first time since April.

CBOT July wheat finished down 23-3/4 cents at $6.39 per bushel after dipping to $6.37-1/4, the contract’s lowest since April 14.

Grains followed declines in crude oil and gold as the U.S. dollar rose sharply after the U.S. Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.

Commodity funds hold a net long position in CBOT corn, soybean and soyoil futures, leaving the markets prone to bouts of long liquidation.

“All these outside markets — the funds (are) just exiting. The charts, certainly in beans, meal and oil, look ugly,” said Dan Cekander, president of DC Analysis.

CBOT soybean, soyoil, soymeal and corn futures will trade with expanded daily limits for Friday’s session, the exchange said.

On the weather front, traders expect showers to bring some relief to dry areas of the U.S. Corn Belt over the next two weeks, improving production prospects.

“When the market sees rain in front of it, it extracts premium accordingly,” said Dan Basse, president of AgResource Co in Chicago.

However, severe moisture deficits suggest crop yields in key production areas remain at risk. Thursday’s weekly U.S. Drought Monitor, prepared by a consortium of climatologists, showed severe drought across 41 per cent of Iowa, the top U.S. corn producer and the No. 2 soy grower.

CBOT July soyoil fell by its expanded 5.5-cent daily limit to 56.57 cents/lb., nearly nine per cent on the day, as global vegetable oil markets, including Euronext rapeseed and Malaysian palm oil futures, retreated from all-time highs set in recent months.

Soyoil futures have faced pressure following news the U.S. Environmental Protection Agency is considering ways to provide relief to U.S. oil refiners from mandates requiring the blending of biofuels including soy-based biodiesel.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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Live cattle futures dropped for the fourth time in five sessions, erasing all of the prior session’s gains, while lean hogs slumped to their lowest point since August 2018 after U.S. President Donald Trump extended coronavirus emergency measures through the end of April.

Stay-at-home orders and restaurant closures have slammed livestock prices as traders weighed burdensome meat supplies against a downturn in demand and livestock supply chain disruptions.

“This drop was coronavirus related. Specifically, it was the White House news conference on Tuesday creating an environment where the market had to reevaluate what the supply/demand was going to be moving forward,” said Mike Zuzolo, president of Global Commodity Analytics.

“This was wide risk-off selling and computer trading throwing in the towel. We hit sell stops and other triggers,” he said.

CME April live cattle fell to 97.325 cents/lb., while actively-traded June futures finished at 87.575 cents, both down by their expanded 4.5-cent daily limit (all figures US$). All other live cattle contracts, except for thinly traded August 2021 futures, also ended limit-down.

All feeder cattle contracts fell by their daily 4.5-cent limit as well, with actively traded May futures ending at 118.4 cents/lb.

All lean hog contracts also dropped by their daily limits, with April futures ending at 49.2 cents/lb. and most-active June 57.325 cents, down three cents. Spot April through July 2020 contracts posted new life-of-contract lows.

The trading limit for live cattle will remain at the expanded 4.5 cents on Thursday, while the feeder cattle limit will increase to 6.75 cents and the lean hog limit will widen to 4.5 cents, according to the CME Group.

Sharply lower cash market prices kept pressure on futures as key beef and pork market indicators continued to dive amid coronavirus-fueled demand uncertainty.

A limited number of cattle traded at least $4/cwt lower on the closely followed weekly online fed cattle exchange on Wednesday.

The choice boxed beef cutout value plunged to $235.17/cwt on Wednesday, down nearly $8 from the previous day, while the pork carcass cutout fell nearly $3, to $62.05/cwt, according to the U.S. Department of Agriculture.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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Live cattle and feeder cattle futures on the Chicago Mercantile Exchange also declined, pressured by long liquidation and softening beef prices.

CME lean hog futures tumbled after the U.S. Department of Agriculture said export sales of U.S. pork in the week to April 18 totaled 15,500 tonnes, but included no new sales to China. In fact, China canceled sales of about 200 tonnes.

“In hogs, it’s the export sales today,” Don Roose, president of Iowa-based U.S. Commodities, said of the sell-off in futures.

“The market got a little too enthusiastic. With record supplies of (U.S.) hogs coming at us, we know we have to have this strong demand underneath the market,” Roose said.

Traders have been expecting that China, home to the world’s largest hog herd, will need to import more pork from the U.S. and other suppliers because of an outbreak of a fatal hog disease, African swine fever.

The spread of the disease across China helped lift CME June hog futures to a contract high on April 5 of 99.825 cents/lb. (all figures US$).

But the market has since failed to match that mark, even after USDA last week reported China bought 23,473 tonnes of U.S. pork in the week to April 11, its third biggest purchase in records dating to 2013.

CME June lean hog futures on Thursday settled down the three-cent limit at 89.775 cents/lb., a 3-1/2 week low.

The CME Group said the daily limit in lean hogs for Friday’s trade would expand to 4.5 cents.

Live cattle futures fell Thursday for a fourth straight session on weaker values for cash cattle and soft beef prices. Cash cattle traded this week at $126-$127/cwt, traders said, down roughly $2 from last week.

Wholesale beef prices declined on Wednesday and Thursday, with choice boxed beef last quoted at $232.96 per cwt, down three cents, and select cuts down 53 cents at $219.75, according to USDA.

“This is the strongest time of the year for demand for beef. It’s grilling season. But boxed beef was down yesterday; that wasn’t a good sign,” Roose said.

Commodity funds hold sizable net long positions in CME live cattle, feeder cattle and lean hog futures, leaving all three markets vulnerable to bouts of long liquidation.

CME June live cattle futures settled down 2.975 cents at 115.375 cents/lb., dropping below its 200-day moving average. August live cattle futures closed down 2.9 cents at 112.925 cents/lb.

August feeder cattle tumbled 3.475 cents to end at 153.25 cents.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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Snow in states such as Kansas, Nebraska and Iowa this week is expected to slow the transportation of cattle to processing plants run by companies such as Tyson Foods and JBS, traders said.

Cattle typically do not gain weight as quickly in cold weather because they consume feed to generate body heat, which can also limit livestock supplies to packers.

“Live cattle and feeder cattle futures find support in yet another winter storm in our nation’s midsection,” said Arlan Suderman, chief commodities economist for broker INTL FCStone.

Chicago Mercantile Exchange February live cattle rose 1.25 cents, to 127.875 cents/lb., and set a contract high (all figures US$). It was the highest price for a front-month contract since February 2018.

April live cattle was up 1.275 cents at 128.45 cents/lb.

March feeder cattle futures gained 1.15 cents to 143.75 cents/lb.

“We certainly think these are valid moves today based on the weather events that are lined up this week,” said Rich Nelson, chief strategist for broker Allendale.

In the hog market, CME lean hog futures fell the daily limit of three cents. As a result, the exchange will expand the limit to 4.5 cents on Wednesday.

Futures have been under pressure lately from large hog and pork supplies and weak pork prices.

“Heavy snows in all of hog country today and tonight will further back up marketings and push back the date when we get supply returning to normal,” Nelson said.

CME April lean hogs ended down three cents at 56.525 cents/lb., a contract low.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Most-active CME December live cattle dropped by the daily price limit of three cents to finish at 114.425 cents per pound, reversing from Friday’s 1-1/2 month high (all figures US$). Front-month October cattle settled 2.35 cents lower at 109.225 cents.

The U.S. Department of Agriculture following the close of futures trading on Friday said the number of cattle that moved into feedlots spiked three per cent last month. Analysts had predicted a decline in placements of nearly three per cent.

Bigger placements suggested more cattle would reach slaughter weight by late this year and early next year.

USDA also showed ample supplies of U.S. beef in cold storage, further pressuring cattle futures.

“It was a knee-jerk reaction,” CHS Hedging Steve Wagner said of the selling in cattle.

December cattle quickly fell by the daily price limit when trade resumed on Monday and remained locked limit-down until the close. CME October feeder cattle fell by their price limit of 4.5 cents to finish at 151.6 cents/lb.

Trading limits in live cattle will be expanded to 4.5 cents on Tuesday and feeder cattle limits to 6.75 cents, the CME Group said on its website.

Wagner said cattle futures could rebound based on strong demand from beef packers. Packers last week in the southern U.S. Plains paid about $108/cwt for cattle, up from $105 to $106 in the previous week.

CME lean hog futures were higher, recovering from recent losses on technical buying and unwinding of cattle-hog spreads.

Front-month CME October lean hogs fell to a contract low of 55.375 cents/lb., before finishing up 0.625 cent at 56.325 cents. Most-active CME December hogs gained 0.8 cent to 57.425 cents.

“It’s a reversal… the (hog) market has been oversold long enough where we can have a nice bounce,” Wagner said.

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

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Friday was the first of five days that funds in CME’s livestock markets that track the Standard + Poor’s Goldman Sachs Commodity Index sold, or “rolled,” June long positions into deferred months.

June and August closed at 128.3 and 121.175 cents/lb., respectively (all figures US$). Monday’s limit will be expanded to 4.5 cents.

CME on Friday raised live cattle futures margins in response to market volatility, said traders and analysts.

“Futures hit their tops after packers raced each other for cattle. And you had some liquidation today, partly because of the margin change requirement,” said Vetterkind Cattle Brokerage president Troy Vetterkind.

Tight supplies and impressive wholesale beef demand supported this week’s $140-$147/cwt slaughter-ready, or cash, cattle prices. Cash cattle last week brought $136 to $140.

Robust U.S. exports and spring grilling-inspired beef cutout values also helped drive up cash cattle returns.

Friday morning’s average wholesale beef price, or cutout, climbed $2.19/cwt, to $237.77, from Thursday. Select cuts were up $1.16, to $218, the U.S. Department of Agriculture (USDA) said.

Friday’s USDA monthly export data showed March total U.S. beef exports at 234 million lbs., up 13.9 per cent from February and up 25.2 per cent from a year earlier.

CME feeder cattle dropped by its 4.500-cent limit following live cattle futures’ limit-down settlement. Monday’s feeder cattle limit will increase to 6.75 cents.

May and August feeders settled at 143.775 and 153.425 cents, respectively.

Hogs settle higher

This week’s firmer cash and pork cutout values landed CME May lean hogs above the 40-day moving average of 69.399 cents, said traders.

They said CME’s cattle market selloff and profit-taking capped May hog futures gains and weighed on the June contract.

Thinly-traded May closed 0.4 cent/lb. higher at 69.4 cents. Most actively traded June ended down 0.15 cent to 76.325 cents.

Packers raised bids for supplies five sessions in a row as supplies begin tapering off seasonally, said traders.

Spring barbecues, brisk U.S. pork exports and increased retail demand for Mother’s Day meals supported the pork cutout over the last six sessions, they said.

Friday’s USDA data showed March U.S. pork exports totaled 523.8 million lbs., up 16.3 per cent from February and up 15.6 per cent from a year ago.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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Chicago Mercantile Exchange lean hogs fell roughly five per cent for their biggest daily declines in weeks while live cattle dropped by their daily limit of three cents/lb.

Hogs sold off ahead of a quarterly U.S. Department of Agriculture hogs and pigs report released after the close of trading, in which the government showed the U.S. hog herd to be larger than analysts anticipated in data that could portend further losses when trade resumes on Monday.

USDA said the U.S. hog herd was 70.851 million head, the highest for any quarter in a dataset started in 1988. The herd was 102 per cent of last year, up from analyst estimates for 101.2 per cent.

“You have too much meat around,” said John Ginzel, analyst at the Linn Group brokerage. “The packers and retailers are digging in their heels and widening out their margins at the expense of the feedlots and hog producers.”

CME lean hogs on a continuous chart fell to 49.025 cents/lb., the lowest level since Oct. 6, 2009. For the quarter, hogs declined 40 per cent for their worst quarterly performance in Reuters data going back to 1973.

Most-active December hogs settled down to their daily price limit of three cents at 43.975 cents/lb.

Front-month October live cattle futures fell to 98.9 cents/lb., the lowest point on a continuous chart since November 2010. Cattle futures for the quarter lost 17 per cent.

CME October feeder cattle finished 4.35 cents lower at 123.15 cents/lb., rising slightly from their earlier lows of 123 cents.

Trading limits in live cattle and lean hogs will be expanded to 4.5 cents for Monday’s session, the CME Group said on its website.

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

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October and December settled down by the three-cent limit to 103.825 and 103.125 cents, respectively (all figures US$). Live cattle’s trading limit will be expanded to 4.5 cents on Wednesday.

Packers on Tuesday bid $104/cwt for slaughter-ready, or cash, cattle in Texas and Kansas that were priced at $110, said feedlot sources. Last week, cash cattle fetched roughly $105/cwt.

Futures’ two-day slide and 30,000 more cattle for sale than last week may work against cash prices, said analysts and traders. They said some packers might soon cut slaughter rates to maintain their substantial margins and stimulate wholesale beef demand.

“Wholesale beef buying will likely be minimal with this being the last week of the month and October National Pork Month is on the horizon,” said Doane Advisory Services economist Dan Vaught.

Tuesday morning’s choice beef price jumped $1.74/cwt from Monday, to $188.78. Select cuts rose 47 cents, to $180.12, the U.S. Department of Agriculture said.

Average beef packer margins for Tuesday were a positive $85.05 per head, up from a positive $55.50 on Monday, as calculated by HedgersEdge.com.

CME live cattle futures’ selloff and $5-$8/cwt lower cash feeder cattle prices sank the exchange’s feeder cattle market.

Most-actively traded October closed 4.2 cents/lb. lower at 126.85 cents. November settled down by the 4.5-cent per pound daily price limit to 123.375 cents.

Hog market repeats 10-month low

Bearish market fundamentals and active CME live cattle market selling pressed the exchange’s lean hog contracts to a 10-month low for a second straight day, traders said.

October closed 1.35 cents per pound lower at 51.7 cents, and posted a fresh contract low of 51.500 cents. December ended down 2.150 cents to 46.450 cents and made a new low of 46.275 cents.

Tuesday morning cash prices in the U.S. Midwest were steady to $1/cwt lower as supplies grow seasonally, said regional hog merchants.

They said pork cut values retreated after most grocers bought all they need for October Pork Month.

Tuesday morning’s USDA data showed the wholesale pork price fell $1.04/cwt from Monday to $77.57.

Investors await USDA’s quarterly hog report on Friday at 2 p.m. CT.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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