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Cattle futures gain ground on end-of-year position squaring
2 January 2025
2 minute read
Chicago Mercantile Exchange (CME) lean hog futures fell to two-month lows on Tuesday, as traders squared positions before the year’s end and uncertainty lingered over export demand in the coming months, Reuters reported, citing market analysts.
CME February lean hogs settled down 0.325 cent at 81.300 cents per pound, having reached lows of 80.000 cents per pound earlier in the session, the lowest price since Oct. 16.
Year-end positioning by funds, which have held a large net-long position in lean hog futures, was a major factor behind Tuesday’s dive, the fourth straight retreat for the hogs, said Austin Schroeder, senior livestock analyst with Brugler Marketing and Management.
Concerns about China’s economy, which has struggled this year with a property crisis and tepid domestic demand, as well as possible hikes in US tariffs on China’s goods when US President-elect Donald Trump takes office in January, also weighed on hog futures, according to analysts.
Schroeder added weakness in wholesale prices also added pressure: The US Department of Agriculture (USDA) reported the pork cutout was lower on Tuesday afternoon, with carcasses down $4.02 to $90.30 per hundredweight (cwt).
CME cattle futures also gained ground on end of year position squaring, said Schroeder.
February live cattle settled up 1.300 cents at 191.600 cents per pound. January feeder cattle futures finished up 1.40 cents at 263.025 cents per pound, the highest since May 29. Five other feeder cattle futures contracts set highs on the session.
USDA reported choice cuts of boxed beef on Tuesday afternoon fell $1.15 to $324.22 per cwt. Select cuts fell $0.24 to $294.52 per cwt.
Profit margins for beef packers remained in the red with packers losing about $10.00 per head of cattle, according to livestock marketing advisory service HedgersEdge.com. The losses had shrunk somewhat from Monday’s $32.55 per head and the $69.95 per head packers lost a week ago.
