Chicago | Reuters — Chicago Mercantile Exchange cattle futures firmed on Wednesday, supported by tightening cattle supplies and strong cash trade that continue to push front-month futures to near eight-year highs.
“The cash price outlook right now is very firm,” said Doug Houghton, technical analyst at Brock Capital Management. “The overall supply outlook is for tightening supplies and higher prices.”
CME benchmark April live cattle futures added 0.1 cent, to 163.7 cents/lb., while front-month February live cattle gained 0.225 cent, to 160.8 cents (all figures US$).
The front-month live cattle contract climbed to 161.5 cents, its highest on a continuous basis since April 29, 2015.
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CME March feeder cattle futures eased 0.75 cent, to 186.45 cents/lb.
Live cattle traded steady-to-firmer across the U.S. Plains, with some trade in Kansas as high as $159 per hundredweight (cwt), the U.S. Department of Agriculture said.
Meat prices were mixed-to-lower, with select cuts easing $4.17, to $253.16/cwt, while choice cuts firmed 48 cents, to $267.20/cwt, USDA said.
Hogs firmed after dipping to 13-month lows yesterday, as packers continue to catch up from backlogs in market-ready supplies around the beginning of the year.
“Hog slaughter, which has been running above expectations the last few weeks, may be slowing as supplies tighten,” Houghton said.
Packers processed 482,000 head on Wednesday, down 8,000 from the same period a week ago, USDA said.
Most-active April hogs added 0.8 cent to 84.075 cents/lb., while June hogs gained 1.35 cents, to 102 cents.
The CME’s Lean Hog Index, a two-day weighted average of cash hog prices, last traded up 22 cents to $73.51/cwt.
— Reporting for Reuters by Christopher Walljasper in Chicago.
