Chicago | Reuters – Chicago Mercantile Exchange live cattle futures hit a one-week low on Monday on bigger-than-expected U.S. supplies, while feeder cattle dropped to a five-month low, analysts said.
Traders have been expecting cattle supplies to tighten but did not see signs of it in October, said Rich Nelson, chief strategist for agricultural commodities brokerage Allendale. Show lists of cattle being offered for sale to packers were higher on Monday, he said.
“We’re still not getting evidence yet of this supply decline,” Nelson said.
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Some traders said futures prices were too high compared to cash market and that rising prices for corn and wheat added further pressure to feeder cattle.
December live cattle futures settled down 0.425 cent at 128.850 cents per pound and reached its lowest price since Oct. 22. The January feeder cattle contract tumbled 3.4 cents to settle at 152.725 cents per pound and touched its lowest price since June 1.
The U.S. Department of Agriculture said packers slaughtered 121,000 cattle on Monday, up from 120,000 head a year earlier. They slaughtered 481,000 hogs, down from 492,000 hogs a year earlier.
In CME lean hog futures, the benchmark December contract edged up 0.075 cent to 76.150 cents per pound and traded inside the range of Friday’s session. February lean hogs closed the day up 0.125 cent at 78.800 cents per pound.
Hog supplies are looking tighter than expected, Nelson said.
“We’re definitely re-evaluating how low hogs need to go,” he said.
In other news, Chinese researchers say they have found a way to produce an animal feed protein from carbon monoxide in what is being hailed as a breakthrough that could help reduce the country’s reliance on huge volumes of imported soybeans.
