Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange (CME) hit the highest in nearly three weeks on Friday, supported by firm cash cattle markets and what appeared to be speculative buying, analysts said.
Most-active CME February live cattle futures settled up 0.45 cent at 155.85 cents/lb. after reaching 156.125 cents, the contract’s highest since Nov. 1 (all figures US$). The spot December contract rose 0.325 cent to finish at 153.075 cents/lb.
CME January feeder cattle ended up 0.8 cent at 180.775 cents/lb.
Live cattle drew support this week as cash cattle traded in Kansas at $151-$152 per hundredweight (cwt), up $1 to $2 from last week, and in Texas at $150-$151/cwt, steady to $1 higher from last week.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
“The cash market being firm is a part of it,” said Alton Kalo, economist at Steiner Consulting Group, of the strength in cattle futures. “There is some speculative interest that wants to come in. The Cattle on Feed report that came out certainly proved them right.”
After the CME close, the U.S. Department of Agriculture’s monthly Cattle on Feed report put the number of cattle placed into feedlots during October at 2.108 million head, down six per cent from a year ago, while analysts surveyed by Reuters on average expected a decline of only 3.5 per cent.
USDA reported the number of cattle on feed as of Nov. 1 at 11.706 million head, down two per cent from last year, while analysts on average expected a decline of 1.7 per cent.
“It was a bullish report,” Kalo said. “The supply of market-ready cattle continues to decline. So that sets the stage for tighter supplies as we go into the first quarter,” he added.
With markets closed on Nov. 24 for Thanksgiving, meat packers have a short week next week to buy enough cattle for a full week of slaughter the following week.
CME lean hog futures closed lower, with the most-active February contract snapping a four-session advance. February hogs settled down 1.25 cents at 89.55 cents/lb.
Front-month December fell 0.75 cent to finish at 84.225 cents/lb., but gained relative to the February contract on spreads.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
