CME update: cattle futures sag on technical selling

US cattle futures closed lower on 21 April on lackluster cash markets, soaring feed costs and technical selling.

22 April 2021

2 minute read

North America

Reuters reports that Chicago Mercantile Exchange June live cattle futures settled down 1.950 cents at 117.250 cents per pound, with chart-based selling accelerating as the contract fell below its 100-day moving average near 117.650 cents.

CME August feeder cattle futures ended down 2.600 cents at 151.925 cents per pound, pressured as Chicago Board of Trade corn futures neared an eight-year high above $6 a bushel, signaling higher cattle feed costs.

In the cash market, cattle traded in Texas and Kansas at $119 to $120 per cwt, steady to $1 lower than last week, the US Department of Agriculture said.

"The market is waiting for any sort of positive news on the cash side, and so far there has not been much," said Altin Kalo, economist at Steiner Consulting Group.

He noted that commodity funds hold net long positions in CME live cattle and lean hog futures, leaving both markets vulnerable to bouts of long liquidation.

Traders shrugged off support from robust wholesale beef prices. Choice cuts of boxed beef rose $2.20 at $280.46 per cwt on Wednesday, a 10-month high. Select cuts were up $1.41 at $271.88 per cwt, according to USDA data.

Traders await the USDA's weekly export sales report on Thursday and its monthly cattle-on-feed report on Friday. Analysts surveyed by Reuters on average expect the USDA to show a 33.7% increase in the number of cattle placed in U.S. feedlots in March compared with the previous year.