Chicago | Reuters — U.S. live cattle futures fell on Thursday as short-term processing delays caused by power outages and frigid weather backed up cattle and softened cash prices, traders said.
Chicago Mercantile Exchange April live cattle futures settled down 1.225 cents at 122.925 cents/lb., while the spot February contract ended 0.175 cents lower at 115.125 cents/lb. (all figures US$).
CME March feeder cattle fell 0.225 cents to settle at 138.2 cents/lb.
Unusually cold temperatures and snowfall across Texas and the Southern U.S. Plains have killed cattle and idled meat plants due to power outages.
Backups have lead to 81,000 fewer cattle slaughtered by Thursday of this week, compared to the same period a week prior, according to the U.S. Department of Agriculture.
“We’ve seen disruptions all week, and that does back up a few extra numbers into next week,” said Rich Nelson, chief strategist at Allendale Inc.
The disruptions will likely be offset by lower cattle weights caused by the extreme cold, Nelson said.
Boxed beef prices firmed for a fourth consecutive day, with the price for choice cuts of boxed beef rising $1.34, to $238.85/cwt, while select cut prices added $1.83, to $227.47/cwt, according to USDA.
Cattle markets were further pressured by larger-than-expected U.S. jobless claims, which could slow consumer demand, according to Nelson.
Meanwhile, CME April lean hog futures added 0.025 cents to 84.925 cents/lb., supported by expectations of lower production into the spring, coupled with increased pork consumption as consumer demand increases, said Nelson.
“Once we finish with March, we will see some year-over-year declines in production,” he said.
Hogs also saw a dip in slaughter, with just 479,000 processed compared to 488,000 a week prior, contributing to a week-to-date shortfall of 183,000 hogs compare to the same period last week.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.