CHICAGO — CME Group live cattle futures eased on Wednesday, pressured as processors pull market-ready cattle forward heading into the late spring, analysts said.
June live cattle futures are discounted versus the cash market, creating an incentive to sell before cash falls.
“We’re going to start narrowing up cash and the June board,” said Scott Varilek, broker at Kooima Kooima Varilek Trading Inc. “Producers are willing sellers, because they see that discount.”
CME June live cattle futures lost 0.500 cent to settle at 134.825 cents per pound.
Cash cattle much of its recent strength, with Northern trade maintained at $146.00 per cwt, while Southern Plains cattle traded steady at $140.00 per cwt, according to the US Department of Agriculture.
Wholesale firm demanded, with choice cuts of boxed beef adding 19 cents to $259.74 per cwt, while select cuts gained 34 cents to $247.68 per cwt, the USDA said.
Feeder cattle were little changed, awaiting direction from corn futures, used as a feedstock. High corn prices have prompted cattle producers to drop weights and move livestock forward more quickly, Varilek said.
“Nobody was figuring on $8 corn when they were buying these feeder calves that are now ready,” he said.
CME August feeder cattle eased 0.075 cent to 176.200 cents per pound.
Meanwhile, lean hogs gained on technical support after falling to more than three-month lows on Tuesday.
Benchmark June lean hogs added 2.900 cents to 105.100 cents per pound, bouncing off its 200-day moving average. July hogs firmed 3.2 cents to 107.050 cents per pound.
Lean hogs have fallen over the last two weeks, pressured by persistent lockdowns across China in an attempt to curb the spread of COVID-19 that suppress demand for pork exports from the US
The Lean Hog Index, a two-day weighted average of cash hog prices, fell 44 cents to $101.15 per cwt. (Reporting by Christopher Walljasper; Editing by Shailesh Kuber)