LIVESTOCK-CME live cattle eases with cash; tight supply underpins
By Christopher Walljasper
CHICAGO, Sept 30 (Reuters) - Benchmark live cattle futures on the Chicago Mercantile Exchange eased on Friday, pressured by softening cash trade across the U.S. Plains, though markets remain supported by tightening supplies as producers continue to liquidate their herds, analysts said.
"Our short-term supply issues are still front and center. We're running 2-3% higher than last year's slaughters. On top of that, we have six months in a row of no significant drops in feedlot placements," said Rich Nelson, chief strategist at Allendale Inc.
CME October live cattle eased 0.085 cent to 143.275 cents per lb, while the most-active December contract lost 0.725 cent to 147.005 cents.
CME November feeder cattle fell 3.200 cents to 174.625 cents per lb., after Chicago Board of Trade corn futures gained on smaller-than-expected stocks reported by the U.S. Agriculture Department. Corn is a primary feed for cattle.
Cash cattle trade in the northern U.S. plains slowed to end the week, trading around $145 per cwt, while southern U.S. Plains cattle traded a dollar lower at $142 per cwt, the USDA said.
Cattle processing slowed on Friday, with 115,000 head slaughtered, down 10,000 from the week prior and the lowest daily slaughter number reported since Aug. 5.
Meanwhile, CME lean hog futures firmed on Friday, supported by the USDA's quarterly hog and pigs report released Thursday after the close that showed smaller-than-expected supplies of hogs.
"I think in the short term, the December contract is pricing in its whole-year low right now," said Nelson. "We're pricing in all the winter bearishness."
CME October hogs eased 0.225 cent to 89.225 cents per lb, while most-active December hogs added 0.500 cent to 76.225 cents per lb.
The CME's Lean Hog Index, a two-day weighted average of cash hog trade, fell 46 cents to 95.14 per cwt. (Reporting by Christopher Walljasper in Chicago; Editing by Shailesh Kuber)
© Copyright Thomson Reuters 2022. Click For Restrictions - http://about.reuters.com/fulllegal.asp