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Live cattle, lean hog futures end higher - CME

01 February 2022

Cattle futures impacted by rising US slaughter pace

Benchmark Chicago Mercantile Exchange (CME) live cattle futures hit the highest in nearly a month on Monday, supported by an improving US slaughter pace and signs of a shrinking US cattle herd, traders said.

CME April live cattle futures settled 1.425 cents higher at 144.525 cents per pound after reaching 144.825 cents, the contract's highest since 3 January, reported Reuters.

March feeder cattle futures ended 3.400 cents higher at 163.025 cents per pound, buoyed by a lower close in corn futures that signalled cheaper feed costs.

US meat packing plants killed 120,000 cattle on Monday, up from 115,000 cattle a week ago, the US Department of Agriculture (USDA) said. The figures signaled rising demand for market-ready animals following a lull in recent weeks tied to worker shortages amid a surge in Omicron coronavirus infections.

"Chain speeds continue to improve at packing plants, strengthening demand for animals, and with this afternoon's cattle inventory report expected to confirm a shrinking herd," Arlan Suderman, chief commodities economist at StoneX, wrote in a client note.

After the CME close, the USDA reported the US beef cow herd at 30.1 million head as of 1 January, down 2% from a year earlier and the lowest since 2015.

"We're going to have less beef in the pipeline," a factor that could induce cattle producers to expand their herds, said Altin Kalo, agricultural economist for Steiner Consulting.

CME lean hog futures closed higher Monday in range-bound trade, with firming cash hog prices lending support.

April lean hogs settled 0.775 cent higher at 95.700 cents per pound but stayed inside of Friday's trading range.

Pork processors slaughtered 475,000 hogs on Monday, up from 448,000 head a week ago, the USDA said.

Source: Reuters



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