Chicago | Reuters — Chicago Mercantile Exchange live cattle futures dropped on Friday as cash market prices this week were lower than anticipated, while lean hog futures dropped for a third straight session.
Weakening wholesale beef prices added pressure to live cattle, along with adequate supplies of animals available to packers through the summer.
The U.S. Department of Agriculture’s monthly cattle on feed report, released after the close, showed the Feb. 1 inventory of U.S. cattle and calves on feed rose one per cent from a year earlier and was the highest on record for that date. The figure, however, was largely in line with market expectations.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Fed cattle at U.S. Plains markets traded mostly at $141-$142/cwt this week, steady to down $1 from the prior week and below early-week expectations (all figures US$).
“Cash cattle sales were certainly a disappointment for the week,” said Rich Nelson, chief strategist with Allendale Inc.
CME April live cattle ended 0.375 cent lower at 141.925 cents/lb., the lowest in nearly a month. The contract, however, found some technical chart support around its 100-day moving average, limiting a further slide.
Feeder cattle futures bucked the broader decline in livestock markets to close higher, supported by a sharp drop in feed corn costs.
CME March feeder cattle gained 0.925 cent to settle at 160.025 cents/lb., while April feeders rose 0.95 cent, to 164.75 cents.
Lean hogs extended a recent drop after hitting contract highs at midweek in a continued market correction.
CME April hog futures fell 1.85 cents to settle at 103.675 cents/lb., while June hogs ended down 2.225 cents at 113.875 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
