US cattle, hog futures decline - CME
Traders lock in profit
17 January 2025
2 minute read
By: Chicago Mercantile Exchange (CME) live cattle futures closed lower on Thursday due to profit-taking, as the most-active contracts failed to surpass last week's long-term highs, while grains, crude oil and Wall Street equities also declined, Reuters reported, citing analysts.
February live cattle futures settled 1.925 cents lower at 196.600 cents per pound and April live cattle fell 1.650 cents to end at 197.675 cents.
CME March feeder cattle ended down 2.075 cents at 267.725 cents a pound.
Speculators have been aggressive buyers of live cattle futures since September. Managed funds stretched their net long position in CME live cattle futures to 144,486 contracts in the latest week, the largest in nearly six years, weekly commitments data from the US Commodity Futures Trading Commission showed.
The big net long leaves the market vulnerable to bouts of long liquidation on days when supportive news is lacking. Some market players may also be heading to the sidelines ahead of the incoming administration of US President-elect Donald Trump.
"The funds are pretty heavily long and they are somewhat over-bought," said Doug Houghton, analyst at Brock Associates.
"How much of this is positioning before the long weekend and the presidential inauguration, the uncertainty about trade issues - it's hard to say," Houghton said.
Despite Thursday's pullback, supply and demand fundamentals remain supportive for cattle. Drought in recent years slashed the nation's herd to its smallest size in decades, a factor that has buoyed cash cattle and wholesale beef prices.
"Until there are signs that the cash situation changes ... it's hard to see a big downside for futures," Houghton said.
The US Department of Agriculture's (USDA) boxed-beef index for choice cuts eased from a 19-month high set on Wednesday. The USDA priced choice cuts of beef on Thursday afternoon at $333.41 per hundredweight (cwt), down 73 cents from Wednesday's 19-month peak of $334.14.
CME lean hog futures also declined on Thursday after the April contract failed to match Wednesday's one-month high. April hogs settled down 0.475 cent at 90.550 cents per pound and front-month February hogs ended down 0.825 cent at 82.300 cents per pound.
The USDA priced pork carcasses at $90.39 per cwt on Thursday afternoon, down 44 cents from the previous session.
