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CHICAGO — CME Group live cattle futures firmed on Tuesday, supported by lower cattle supplies and the impact of cold weather on cattle weights, traders said.
Winter weather last week across the U.S. Great Plains likely caused cattle to lose weight amid snow and below-freezing temperatures, said Brad Kooima, commodity broker at Kooima Kooima Varilek Trading Inc.
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“These big cattle just got blitzed by this weather. Losses of 50 to 100 pounds per head is not unusual,” said Kooima.
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Futures were also boosted by tighter numbers of cattle placed into feedlots in November, falling 2% versus the same month in 2022, the U.S. Department of Agriculture reported after the market close on Friday.
For much of 2022, drought across the U.S. Plains pushed cattle producers to send more heifers to slaughter rather than retain them for breeding, contributing to higher feedlot placements.
The decline in placements indicates that lower cattle supplies are moving through the supply chain, said Kooima, noting that states in the South and West have cut more placements, due to high feed prices.
“It’s especially high in the South, because of freight. Those were the big losers – Texas down 2%, Kansas down 6%,” said Kooima. “Nebraska and Iowa were both up slightly on numbers. So it appears that some of these cattle are moving toward the feed source.”
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Benchmark CME February live cattle added 0.125 cents to 157.875 cents per pound.
March feeder cattle futures slipped 1.350 cents to 185.4 cents per pound, pressured by higher corn futures
Meat prices strengthened, with boxed beef choice cuts firming $8.09 per hundredweight (cwt) to $280.04 and select cuts adding 17 cents to $245.64 per cwt, the USDA said.
CME’s lean hog futures gained, supported by tighter hog supplies, as noted in the USDA’s quarterly hog and pigs report, also released after the bell on Friday.
CME February lean hogs added 3.65 cents to 91.475 cents per pound. (Reporting by Christopher Walljasper in Chicago; Editing by Shailesh Kuber)