By Julie Ingwersen
CHICAGO, Jan 7 (Reuters) – U.S. cattle futures closed
narrowly mixed on Thursday with the spot February contract
drifting lower in range-bound trade, awaiting direction from
cash markets, while back months firmed on optimism about the
U.S. economy, traders said.
Feeder cattle futures rose as prices for corn, the main feed
grain for cattle, retreated from this week’s six-year highs.
“Grains were taking a breather, and that gave feeder cattle
an opportunity to rally,” said Dan Norcini, an independent
Chicago Mercantile Exchange (CME) February live cattle
futures settled down 0.025 cent at 115.975 cents per
pound, staying inside of Wednesday’s trading range, while back
months closed higher.
CME March feeder cattle ended up 1 cent at 137.575
cents per pound.
Deferred contract months in the cattle and hog markets
posted the biggest gains on Thursday, buoyed by fresh highs on
Wall Street and expectations a Democrat-controlled Congress will
deliver more stimulus spending to help the U.S. economy recover
from a pandemic-induced downturn.
“That is all money flowing in from index funds,” Norcini
said, “in anticipation of improving beef and pork demand as the
year progresses, as the vaccines become more widespread and the
lockdowns become more a thing of the past.”
Front-month hog futures were pressured by ample hog supplies
and lackluster cash markets as meat packers work through
backlogs caused by holiday shutdowns. CME February lean hogs
ended down 0.650 cent at 69.125 cents per pound, at a
premium to the CME’s lean hog index at 62.42 cents.
“It’s going to be hard to move February hogs higher if the
cash isn’t moving higher as well,” Norcini said.
Tyson Foods Inc said it resumed slaughtering hogs at
a plant in Columbus Junction, Iowa, three weeks after idling the
facility because of a mechanical malfunction.
However, as in the cattle market, deferred hog futures found
support from speculators investing in commodities as a hedge
“There is a growing sense that the commodity sector as a
whole is going to do very well in 2021,” Norcini said. “So
people are buying out in those further-out months, positioning
(Reporting by Julie Ingwersen
Editing by Chris Reese)
© Copyright Thomson Reuters 2021. Click For Restrictions – http://about.reuters.com/fulllegal.asp
Let’s block ads! (Why?)