Feeder cattle markets retreat as corn prices rise - CME
Lean hogs touch two-week high
13 March 2023
2 minute read
By: Feeder cattle futures on Friday extended a setback from 2015 highs the front-month contract reached this week, as rising corn prices temporarily dampened expectations for cheaper livestock feed, Reuters reported, citing analysts.
Corn futures ended higher on the Chicago Board of Trade after sliding earlier to a seven-month low. Feed is generally the biggest input cost for raising livestock, and cheaper grain prices can increase demand for feeder cattle.
"Corn is a little bit higher today so that works against them," said Altin Kalo, agricultural economist for Steiner Consulting.
CME April feeder cattle settled 1.5 cents lower at 197.650 cents per pound, after setting a contract high of 200.775 cents on Thursday.
Thinly traded March feeders closed 1.6 cents lower at 191.475 cents a pound. On Thursday, the front-month contract FCc1 touched 194.325 cents, the highest on a continuous chart since October 2015.
Profit-taking and weakness in live cattle futures helped pressure the feeder cattle market, traders said. They added that softening beef cutout prices weighed on live cattle, after some buyers reduced purchases because of high prices quoted last month.
Prices for select cuts of boxed beef tumbled $4.51 to $271.54 per cwt, and choice cuts edged up, the US Department of Agriculture (USDA) said.
CME April live cattle ended 0.525 cent lower at 164.275 cents per pound. Supply concerns have supported the market recently, as US cattle producers have reduced herds due to drought.
"The long-term outlook for cattle is higher but it's never a straight-up shot," Kalo said.
US meatpackers slaughtered an estimated 114,000 cattle, down from 117,000 cattle a week ago, and 480,000 hogs, up from 467,000 hogs a week ago, the USDA said.
CME April lean hogs touched a two-week high and finished up 2.375 cents at 87.450 cents per pound.
In global news, Brazil aims to export pork to Australia as part of potential new agricultural trade deals, Brazil's agriculture ministry said.
