Chicago | Reuters — Chicago Mercantile Exchange live cattle futures consolidated on Friday after setting a string on contract highs recently, while lean hog futures eased.
The cattle market looks ripe for a correction after futures rose this month on tightening U.S. supplies, brokers said. However, cattle inventories look even smaller than expected as ranchers have reduced their herds due to high feed prices and drought in the western U.S., they said.
There were 11.7 million cattle and calves on feed for slaughter as of Feb. 1, down 4.1 per cent from a year earlier, the U.S. Department of Agriculture said in a monthly report. Analysts surveyed by Reuters were expecting a 3.5 per cent decline.
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Placements of cattle in feedlots during January were 3.6 per cent below a year earlier, the USDA reported. Analysts expected a 2.9 per cent drop.
“Tighter cattle numbers will be a regular occurrence in 2023 and beyond,” Rabobank said in a note. “Drought and four years of herd liquidation have taken a toll.”
Thinly traded February live cattle futures settled up 0.05 cent at 165.2 cents/lb. after reaching 165.675 cents, the highest on a continuous chart of the front contract since January 2015 (all figures US$).
Most-active April live cattle closed 0.05 cent firmer at 165.375 cents/lb. and set a contract high of 166.4 cents.
Wholesale boxed beef prices were mixed. Choice cuts were priced at $287.28/cwt, down 63 cents from Thursday, according to USDA data. Select cuts rose $1.21, to $277.08/cwt.
“We’ve seen the run-up in boxed beef fade a little bit,” said Matt Wiegand, commodity broker for FuturesOne.
CME March feeder cattle futures settled down 0.15 cent at 189.075 cents per pound after jumping to their highest price since August 2022.
CME April lean hogs ended 0.175 cent weaker at 86.025 cents/lb., while June hogs slipped 0.475 cent to 103.475 cents.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
