Chicago | Reuters — Chicago Mercantile Exchange lean hog and live cattle futures were mostly down on Friday as concerns about winter weather and sluggish export demand had some investors shedding their positions.
Meanwhile, feeder cattle futures firmed, bolstered by corn futures dropping to a 3-year low after U.S. government-issued crop data showing larger-than-expected global supplies, analysts said.
Traders said they are closely tracking the winter storms crossing parts of the central U.S., where frigid temperatures are threatening U.S. herds.
Bitter cold tends to slow cattle weight gains, while hazardous conditions have disrupted movement of livestock, stranded meatpacking workers and shuttered processing plants.
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In the Corn Belt, a strong low-pressure system that is crossing the middle Mississippi Valley is producing wind-driven snow from Nebraska to Lake Michigan, the U.S. Department of Agriculture said in a daily weather report.
“Blizzard conditions in Iowa and environs are causing travel disruptions and increasing stress on livestock, especially since today’s storm is occurring just days after the previous snowfall, which peaked on Jan. 9,” according to the USDA report.
On Friday, meatpackers slaughtered an estimated 105,000 cattle, compared with 124,000 a week ago, the USDA said. Packers also slaughtered an estimated 332,000 hogs on Friday, compared with 489,000 hogs a week ago.
“With these storms coming in, no one wants to overpay for cattle or hogs that can’t get delivered and can’t get processed,” said Karl Setzer, partner at Consus Ag Consulting. “It’s a risk-off mentality in the market.”
Most-active CME February live cattle futures LCG24 settled down 0.425 cent at 171.375 cents per pound.
March feeder cattle FCH24 finished up 0.300 cent at 227.700 cents per pound.
And CME February lean hog futures LHG24 finished down 0.700 cent at 77.900 cents per pound.
