Chicago | Reuters — U.S. live and feeder cattle futures dropped to their lowest prices in about two months on Thursday as traders adjusted positions before a government report that is expected to show an increase in supplies.
Hog futures, meanwhile, advanced to their highest prices in about two weeks.
The U.S. Department of Agriculture is expected to report on Friday the nation had 11.948 million head of cattle on feed for slaughter as of Jan. 1, up 2.2 per cent from a year earlier, according to a Reuters poll of 10 analysts. The agency is expected to say 1.828 million cattle were placed in feedlots during December, up 3.4 per cent from the previous year, the poll shows.
Uncertainty about Chinese demand for U.S. meat also hung over cattle markets, analysts said. Beijing pledged to increase imports of U.S. agricultural products in a trade deal signed last week that is meant to reduce tensions after nearly two years of a tit-for-tat tariff war.
Traders remain uncertain about the timing and scale of future Chinese purchases, though. China needs to further boost meat imports after an outbreak of a fatal pig disease, African swine fever, decimated its herd.
“What does China need more of than anything else? That’s pork,” said Jim Gerlach, president of broker A/C Trading in Indiana.
April live cattle futures fell 2.6 cents to 124.175 cents/lb. at the Chicago Mercantile Exchange and hit their lowest price since Nov. 22 (all figures US$). March feeder cattle futures slid 2.525 cents to 140.525 cents/lb. and touched the lowest price since Nov. 25.
February lean hog futures jumped 0.95 cent to 68.5 cents/lb. at the CME and hit its highest price since Jan. 9. The April contract touched its highest price since Jan. 8 before ending up 0.825 cent at 75.35 cents.
Cutout values also rose for pig carcasses, pork loins and pork butts, according to USDA data.
Meat packers slaughtered an estimated 497,000 hogs on Thursday, on par with a week earlier and up from 473,000 hogs a year ago, the agency said in a separate report. Packers slaughtered an estimated 122,000 cattle, unchanged from a week ago and up from 117,000 cattle a year earlier.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.