Weaker cash market pressures CME fed and feeder cattle lower; hogs down

CHICAGO, Dec 12 (Reuters) – CME live cattle ended lower on Friday as fund selling and weak cash cattle prices weighed, traders said.

Lower U.S. stocks and weak crude oil also pressured the overall livestock futures market, said Lane Broadbent of KIS Futures.

“We are in a tough time of the year as far as beef demand goes. And when there is a stock market sell-off, its takes even more demand away,” Broadbent said.

Market-ready, or cash cattle, sold in the U.S. Plains at US$164 per hundredweight (cwt) compared with $166 to $168 last week.

As beef packer margins remain deeply in red and wholesale beef demand wanes packers were not aggressive buyers in the cash market which pushed prices lower this week.

Beef packer margins for Friday were a negative $115.55 per head, compared with a negative $103.70 on Thursday and a negative $132.00 last week, according to Colorado-based analytics firm Hedgersedge.com.

Friday morning’s Choice wholesale beef price fell $2.16 per cwt from Thursday to $245.63, and falling $6.75 since Monday, the U.S. government data showed.

December live cattle closed down 0.350 cent per lb at 162.050 cents, and February down 0.400 cent at 162.175 cents.

CME feeder cattle futures closed their 3-cents per lb maximum daily price limit for the second consecutive day as weak deferred-month live cattle futures weighed, traders said.

“The feeder market was so high for the last 10-12 months, now we have a sell-off,” Broadbent said.

January feeder cattle and March closed at 225.600 cents and 221.250 cents, respectively.


CME lean hogs closed lower on weak cash market prices and soft wholesale pork demand, traders said.

Early Friday, U.S. Midwest cash hogs traded 50 cents to $1 per cwt lower, according to hog dealers.

Many pork processors have hog supply secured though the end of 2014 which kept buyers out of the market. Also, packing plants need fewer hogs due to holiday closures.

USDA data showed Friday’s wholesale pork price edged up $1.13 per cwt from Thursday to $92.06, but was down $1.25 cwt for the week.

CME December lean hogs ended down 0.025 cent per lb to 87.525 cents. December lean hog’s contract last trade was on Friday, which made the February contract the lead month.

February ended down 1.100 cent to 83.250 cents and April ended down 1.350 cent to 84.350 cents.

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