Chicago | Reuters — U.S. livestock futures strengthened on Wednesday as gains in financial markets helped fuel a recovery from contract lows reached last week in the live cattle market.
Live cattle futures have been looking to equity markets for direction as uncertainty about the impact of the coronavirus epidemic has fueled swings in stock prices. Global equities rose even though the economy-slowing virus outbreak kept investors on tenterhooks.
April live cattle closed 1.175 cents higher at 111.275 cents/lb. at the Chicago Mercantile Exchange (all figures US$). On Friday, futures touched a contract low of 107.475.
June live cattle futures, the second-most-active contract, advanced 1.15 cents, to 104.525 cents/lb. April feeder cattle jumped 1.775 cents, to 135.55 cents/lb.
CME lean hog futures also firmed, with the most-active April contract finishing 0.75 cent higher at 64.3 cents/lb. June hog futures rose 0.75 cent, to 78.825 cents.
Traders were waiting for the U.S. Department of Agriculture to issue weekly export sales data on Thursday. They will look in particular for demand from China, the world’s top pork importer, which is grappling with a fatal pig disease that has decimated its herd.
“We’ve been shipping a lot of pork to China and want that to continue,” a broker said.
The coronavirus outbreak clouded the outlook for Chinese demand, after Beijing pledged to buy more American farm goods as part of an initial trade deal signed in January. U.S. Agriculture Secretary Sonny Perdue told Congress he was hopeful China would follow through on its promises, despite challenges from coronavirus.
“The signals are they want to comply,” Perdue said.
Cash cutout prices were 31 cents/cwt lower for hog carcasses and $4.38 lower for hams, the U.S. Department of Agriculture said. Prices were higher for loins, butts, ribs and bellies.
Boxed beef cutout prices edged higher for choice cuts and dropped for select cuts, USDA data showed.
Meat packers slaughtered an estimated 495,000 hogs on Wednesday, unchanged from a week earlier and up from 475,000 hogs a year ago, according to USDA. Processors slaughtered 122,000 cattle, down from 123,000 cattle a week ago and up from 115,000 a year earlier.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.