CME: Livestock futures rise on supply concerns
Cattle futures ended higher as prices for beef carcass cuts continued to strengthen and spot cattle traded higher, Reuters reported.
Cash cattle traded between $138 and $140 in the Nebraska market on Tuesday, down from $135 last week, said Rich Nelson, chief strategist for commodity brokerage Allendale.
“It looks like the three weeks of declining cattle in cash is now over, and the market is reacting to that,” Nelson said.
Wholesale canned beef prices rose, with choice reductions of $1.21 to $265.87 per hundredweight on Wednesday afternoon, according to data from the United States Department of Agriculture (USDA). Some cuts went up, to $257.20 a quintal.
February CME live cattle futures rose 1.325 cents to 140.725 cents a pound. CME March feeder cattle ended the session up 2.825 cents at 168.050 cents.
U.S. hog futures rose as wholesale prices fell. Prices for pork carcass cuts in the United States fell $2.60 to $84.29 per hundredweight (cwt) on Wednesday, the USDA said. Ham prices rose $5.50 to $65.76.
The most active February hog futures settled the day up 1.200 cents at 83.825 cents a pound. April hogs gained 0.90 cents to 88.450 cents a pound.
Meanwhile, livestock traders said uncertainty over California’s Proposition 12, which imposes new standards for animal housing, could create volatility in the pork market in the coming weeks.
Among other things, the law requires farmers to give sows 24 feet of space in barns and prohibits California companies from knowingly selling uncooked pork from animals housed in violation of that requirement.
The changes are to come into effect on January 1. The measure is being challenged in court.
A key issue, traders said, is pricing: how pork prices will change in California and whether the law will impact how wholesale pork cuts and spot pork prices are calculated.