Chicago | Reuters — U.S. live cattle futures climbed to new contract highs early in the session before settling slightly lower on Tuesday, as traders assessed U.S. cattle inventory levels ahead of the U.S. Agriculture Department’s biannual report.
After the market closed, USDA reported that the U.S. beef cow herd dropped to 28.9 million head, its lowest level since 1962, after a severe drought that raised costs for livestock feed across the U.S. Plains.
“Even though feeder cattle prices are quite high, it’s the uncertainty around feed supply and drought conditions. It’s hard to make the investment, if you’re not sure how weather is going to play out or if you’re going to have the grass available to support those heifers,” said Alton Kalo, economist at Steiner Consulting Group.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Heifers retained for beef cow replacement fell to 5.16 million head, down six per cent from a year ago.
CME February live cattle firmed 0.1 cent/lb., to 158.85 cents/lb. (all figures US$).
The most-active April contract eased 0.325 cents to 163.025 cents/lb., after notching a life-of-contract high of 163.575 cents/lb.
CME March feeder cattle futures gained 2.225 cents to settle at 186.15 cents/lb.
Cattle slaughter was strong to start the week, with 127,000 head processed, up 4,000 head from the same period in 2022, USDA said.
U.S. lean hog futures eased on Tuesday, pressured by stronger supplies of market-ready hogs, Kalo said.
February lean hog futures eased 0.275 cent to 74.875 cents per lb, while most-active April hogs slipped 0.1 cent to 86.425 cents/lb.
“We continue to see more hogs come to market than people expected,” said Kalo.
Hog processors slaughtered 483,000 head on Tuesday, USDA said, up 5,000 head from the same period in 2022.
The CME’s Lean Hog Index, a two-day weighted average of cash hog prices, added seven cents, to $72.71/cwt.
— Reporting for Reuters by Christopher Walljasper in Chicago.
