Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended mixed on Tuesday, with nearby contracts weighed down by expectations for increased supplies of market-ready cattle beginning next month.
Declines were limited by concerns that harsh winter weather last week in northern areas of the U.S. Plains and western Midwest slowed cattle weight gains, which could force packers in the region to pay higher prices for fewer market-ready cattle in the near term.
“The numbers of slaughter-ready animals in the north will be tighter this week and next. Iowa’s snowstorm last week has taken the top off and definitely affected weights,” said Jeff French, a broker with Top Third Ag Marketing in Chicago.
“But from mid-March, we’re going to be running into plenty of slaughter-ready cattle. It’s going to be tough to work through these numbers,” he said.
Investors waited on packer bids to develop following trades last week in the southern Plains at $125-$126/cwt (all figures US$). The tighter supplies in the north could have packers paying higher prices for cattle than in the south, where cattle weight gains have been strong.
CME February live cattle closed down 0.3 cent/lb. at 126.825 cents. April ended 0.225 cent lower at 124.775 cents and June finished down 0.075 cent at 116.65 cents. The August through February 2019 contracts closed higher.
Feeder cattle futures were also mixed, with nearby contracts anchored by profit-taking following strong gains the previous day.
March feeders ended down 0.4 cent/lb. at 147.275 cents while April futures settled 0.025 cent lower at 149.5 cents.
Lean hog futures were mostly lower in a profit-taking setback following a two per cent rally on Monday, pressured by ample supplies of hogs and pork.
February futures, which expire on Friday, shrugged off the weakness and ended up 0.275 cent at 73.35 cents. The actively-traded April contract settled down 1.1 cents/lb. at 69.425 cents.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.