Chicago | Reuters — CME Group live cattle futures gained on Tuesday as traders began positioning ahead of Friday’s monthly Cattle on Feed report from the U.S. Department of Agriculture, traders said.
Feeder cattle futures also rose, supported by weaker feed grain futures. Lean hog futures declined after gaining on Friday as futures look to converge with a lower cash index.
CME April live cattle futures ended 1.15 cents higher at 119.35 cents/lb., while March feeder cattle gained 0.975 cent to settle at 136.8 cents (all figures US$).
Boxed beef cutout values strengthened, with choice cuts firming $2.45/cwt, to $217.49, and select cuts adding 60 cents, to $206.44, according to USDA.
Daily cattle slaughter was up slightly from a week ago at 117,000 head processed, though down 5.6 per cent from the same week last year.
“We assume we’ll see further cutbacks in breeding herd,” said Alan Brugler, president of Brugler Marketing. “We think the cattle cycle topped, and is still unwinding, and COVID just accelerated that process.”
Meanwhile, lean hog futures slid to more closely align with the cash index, as strong slaughter keeps supplies abundant.
CME most-active April lean hogs fell 1.225 cents to 71.425 cents/lb., while the spot February contract fell 1.45 cents to end at 66.475 cents/lb.
The CME lean hog index is 0.91 cent under the February contract at 65.56 cents/lb.
Tuesday saw 498,000 hogs slaughtered, up 2,000 from a year ago and even with the same time last week.
— Reporting for Reuters by Christopher Walljasper in Chicago.