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Cattle Futures Dip Amid Year-End Jitters
30 Dec
Summary
- Live cattle and lean hog futures declined due to year-end positioning.
- Larger-than-expected USDA hog numbers impacted lean hog futures.
- Negative packer margins are a significant concern in the cattle market.
Trading on the Chicago Mercantile Exchange saw mixed results, with live cattle and lean hog futures declining, while feeder cattle futures edged higher. This movement is largely attributed to year-end positioning and thin trading volumes characteristic of the period between Christmas and the New Year.
Analysts noted that potential profit-taking by funds holding net long positions contributed to the downward pressure on futures. Further impacting the lean hog market was the U.S. Department of Agriculture's quarterly hogs and pigs report, which indicated larger inventory numbers than market participants had expected.
The cattle market is also grappling with negative packer margins, a significant bearish factor. Speculation about the potential re-opening of cattle imports from Mexico, currently closed due to the New World screwworm parasite, also adds a layer of uncertainty, though its immediate impact on daily trading is debated.
