Beef, hog markets weighed by demand uncertainty – CME
Chicago Mercantile Exchange (CME) livestock futures mostly ended lower on Thursday, as a sluggish cash market weighed on nearly all cattle markets and hog traders continued to wrestle with concerns about demand for hefty pork supplies, Reuters reported, citing analysts.
The nearby December live cattle futures contract ended the day up on thin technical trading, analysts said.
While there were no reports of cash cattle trades on Wednesday or early Thursday, analysts said producers in the Plains were floating out offers of $174 per hundredweight (cwt), as blizzards and cold winter weather stressed animals and impacted weight gain.
But packers have been cautious not to overbuy, as many facilities will have pre-scheduled plant closures or shortened production schedules before and after the New Year’s holiday, said Dan Norcini, an independent livestock trader.
Traders are closely watching beef demand in both the domestic and export markets, as analysts have been forecasting that demand will wane after the Christmas and New Year’s holidays.
CME live cattle February contract settled down 0.35 cent, at 168.925 cents per pound. CME’s most-active March feeder cattle ended the day down 2.275 cents, at 223.125 cents per pound.
Prices for both select and choice-cut boxed beef fell again on Thursday morning, according to the US Department of Agriculture (USDA).
Packer margins remained in the black for both beef and porkprocessors on Thursday, although margins eased from the previous day for beef packers, according to Hedgersedge.com.
And the daily slaughter rate of cattle was 125,000 head, steady from a week ago and slightly up from a year earlier, the USDA reported on Thursday.
CME lean hog futures all fell on the day, as traders took profits on Wednesday’s uptick in the February contract and adjusted their positions ahead of the holiday weekend, traders said.
CME’s most-active February lean hogs settled down 1.425 cents, at 68.450 cents per pound.