Feeder cattle futures drop on profit taking - CME
Lean hog futures advance
3 December 2024
2 minute read
By: Chicago Mercantile Exchange (CME) feeder cattle futures retreated in a profit-taking setback on Monday after a ten-session rally that took prices to five-month peaks, while live cattle futures followed feeders lower, reported Reuters.
Monday's cattle declines came after managed funds had bolstered their long holdings in both markets over recent weeks, encouraged by tight cattle supplies and resilient demand for beef.
"The managed money added to their net longs in feeders and, to a lesser degree, in fats and it just opened the door for some long liquidation and some profit taking," said Mike Zuzolo, president of Global Commodity Analytics.
News that meat packer Tyson Foods would be closing another of its meat processing plants stoked concern among some livestock traders that the packing industry may be poised for further belt-tightening that could dent livestock demand.
The plant in Emporia, Kansas, which produces seasoned and marinated meats but does not slaughter livestock, is slated to close in February.
"This kind of news is price-negative for the wholesale and producer prices and price-positive for the retail market. It's not a slaughter plant, but it goes along with other Tyson plants that have closed," Zuzolo said.
CME January feeder cattle dropped 2.625 cents to end at 256.850 cents per pound. February live cattle shed 0.700 cent to 188.625 cents per pound.
The declines come after a two-week tear in the feeder cattle market that took prices up more than 6% following a halt in cattle imports from Mexico over a case of New World screwworm in a cow there.
CME lean hog futures advanced on Monday, supported by rising wholesale pork prices.
February hogs jumped 1.625 cents to 86.325 cents per pound.
The wholesale pork carcass cutout gained $2.35 on Monday to $92.66 per cwt, led by a strong gain in hams.
