LIVESTOCK-CME live cattle ease on seasonal retail softness; cash resists pressure
By Christopher Walljasper
CHICAGO, Dec 7 (Reuters) - Live cattle futures on the Chicago Mercantile Exchange dipped on Wednesday, as easing post-holiday retail demand, combined with strong cash cattle prices, eats into processor profitability.
"This week specifically is when we transition to buying for a lower-demand period, post holidays," said Rich Nelson, chief strategist at Allendale Inc. "Packer margins are so stressed right now, from this drop in beef but still strong cash cattle."
CME benchmark February live cattle eased 0.075 cents to 153.550 cents per pound, while the spot December contract inched up 0.375 cent to 151.925 cents per pound.
Most-active CME January feeder cattle lost 0.900 cents to 180.900 cents per pound.
Boxed beef prices gained after steep declines in the last week, with choice cuts adding $6.31 to $248.96 per hundredweight (cwt), while select cuts firmed 63 cents to $219.77 per cwt, the U.S. Department of Agriculture said.
Meanwhile, lean hogs eased, though seasonal losses were capped by optimism that lifted COVID-19 restrictions in China could mean more U.S. exports to the country.
"Seasonally, we should have just about one more week left of pressure. The issue for the hog market is, we’ve all been up and down based on wild exaggerations of Chinese buying expectations," said Nelson.
CME February lean hogs fell 0.275 cents to 86.650 cents per pound.
Nearby December hogs inched up 0.100 cent to 82.375 cents per pound.
The CME's lean hog index, a two-day weighted average of cash hog prices, added 15 cents to $82.94 per cwt. (Reporting by Christopher Walljasper in Chicago; Editing by Maju Samuel)
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