17 April 2023

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) live cattle futures retreated on Friday after racing to all-time highs during the previous three sessions as tightening US supplies rallied cash prices, reported Reuters.

Profit-taking and technical pressured futures following the surge, though the market could still post new highs moving forward, analysts said.

Surging cash prices this week yanked futures above the 2014 record high for a front-month contract as meatpackers must pay more for cattle supplies that have declined due to bad weather and high feed costs.

"The market got overheated this week," said Doug Houghton, an analyst for Brock Associates. "The supply outlook is still very supportive."

April live cattle futures ended down 0.750 at 174.750 cents per pound, after climbing on Thursday to 177.700 cents per pound, a record for the front-month contract.

June live cattle finished 0.775 cent lower at 163.725 cents per pound after reaching a life-of-contract high of 166.275 cents on Thursday.

May feeder cattle rose 0.100 to 207.900 cents per pound.

Cattle traded in the cash market for $180-$186 per hundredweight (cwt) this week in Nebraska, where cold weather made animals gain weight slower than they normally would, brokers said. That was up from about $175 per cwt last week.

In the southern Plains, cash trades were about $175 per cwt, up about $5 from last week, brokers said.

"The cash has just exploded this week," Houghton said. "Until the cash turns around, right now the nearby futures are following the cash."

Brokers said price action in some deferred futures contracts looks technically poor, but that consumer demand for beef remains strong.

Prices for choice cuts of boxed beef shipped to wholesale buyers rose by $2.20 to $302.62 per hundredweight, the US Department of Agriculture said.

In the pork market, CME April lean hogs ended up 0.150 cent at 71.750 cents per pound after dropping to a contract low on Thursday.