Chicago | Reuters — U.S. live cattle futures ended mostly lower on Wednesday as the market retreated from contract highs reached this week.
Feeder cattle and hog futures were also mostly weaker.
Analysts predict meat packers such as Tyson Foods and JBS USA will buy fewer cattle over the next two weeks because Christmas and New Year’s Day will reduce slaughtering schedules. The expectations for easing demand weighed on cattle futures, said Mike Sands, an independent U.S. livestock market analyst.
Heading into this week, December live cattle futures were trading about $3 over cash prices and February futures were about $7 over, Sands said (all figures US$).
“Both of those look pretty rich if we’re looking at a steady-at-best cash market this week,” he said.
Most actively traded February live cattle futures closed down 0.175 cent at 126.125 cents/lb. at the Chicago Mercantile Exchange (CME). The contract on Tuesday matched a high of 127.9 cents from Monday.
January feeder cattle futures eased 0.6 cent to close at 144.55 cents/lb.
Packers slaughtered about 122,000 cattle on Wednesday, up from 117,000 a year earlier, according to U.S. Department of Agriculture data. They slaughtered 494,000 hogs, compared to 484,000 last year.
CME February lean hog futures edged up 0.05 cent to 69.9 cents/lb. Several other 2020 contracts ended lower.
Hog traders are uncertain about China’s demand for U.S. pork after the United States and China reached a ‘Phase One’ trade deal last week.
China is the world’s largest hog producer and pork consumer, and its domestic pork prices have soared after a fatal pig disease decimated its hog herd. China increased purchases of U.S. pork this year, but the trade war has hampered deals.
Traders will assess weekly export sales data from the U.S. Department of Agriculture on Thursday.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.