Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange fell on Thursday, pressured by ample cattle supplies that offer little incentive for packers to bid up the cash market.
“The supply of market ready cattle is a little less than last year, but it’s still plentiful. It just doesn’t seem like the market is worried that we’re going to run out of cattle,” said Altin Kalo, economist at Steiner Consulting Group.
The nearby April live cattle contract firmed 0.3 cent, to 138 cents/lb., better aligning with cash cattle prices, while the most-active June contract eased 0.125 cents, to 134.1 cents/lb. (all figures US$).
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May feeder cattle futures ended 0.475 cent lower at 159.475 cents/lb.
Cash cattle traded steady to lower in the southern U.S. Plains, around $137-$138/cwt, according to the U.S. Department of Agriculture, while the northern Plains saw $138-$140/cwt.
Ample processing has kept supply in check, with 124,000 head of cattle processed on Thursday, 4,000 more than the same period a year earlier.
Much of the oversupply has come from farmer efforts to reduce herd as grazing pastures dry up in the western Plains.
“Those drought pressures have been a factor, and have contributed to more heiffers going into feedlots,” said Kalo.
Boxed beef prices firmed, with choice cuts adding 36 cents to $271.40/cwt, while select cuts gained 17 cents, to $261.22.
Meanwhile, CME lean hog futures eased, pressured by flat cutout values, even as seasonal trends point toward increased pork demand.
“The market was starting to get more optimistic about summer prices,” said Kalo. “But the last month or so, it seems like we’ve hit the wall for pork prices.”
CME nearby April lean hogs firmed 0.3 cent to 99.05 cents/lb., while the benchmark June contract eased 0.55 cent to 114.15 cents/lb.
Hog processors slaughtered 479,000 head, 11,000 below the same day last year.
The CME’s lean hog index, a two-day weighted average of cash hog prices, fell 0.58 cents, to 101.08 cents/lb.
— Reporting for Reuters by Christopher Walljasper in Chicago.
