Chicago Mercantile Exchange live cattle futures fell sharply on Friday and hit daily trading limits on weaker cash market prices and easing concerns that frigid weather in feedlot areas could disrupt marketings.
Fund selling, or “rolling,” of lead-month positions into deferred months ahead of similar moves early next week added pressure.
Monday will be the first of five days that funds in CME’s livestock markets, which track the Standard & Poor’s Goldman Sachs Commodity Index, roll February long positions primarily into the April and June contracts.
CME February live cattle futures ended down the daily 3.000-cent limit at 119.250 cents per pound. April also traded limit-down but settled 2.975 cents lower at 120.850 cents.
The live cattle trading limit will be expanded to 4.500 cents on Monday following February’s limit-down settlement, per exchange rules.
Cash cattle at Texas and Kansas feedlot markets traded at $122 per cwt lower on Friday, down $1 from a week ago and below early-week expectations for cash sales of at least $125.
Worries about slowed beef demand along the heavily populated East Coast also weighed on futures. The region was pummeled by a winter storm this week, fueling fears of reduced restaurant traffic and weaker demand at grocery stores.
Meanwhile, concerns about slower weight gains among Plains feedlot cattle due to a cold snap eased as temperatures in the region turned milder by Friday.
“We got hit with a double barrel, with fear that demand could slow with the East Coast storms and with the weather in cattle country now rebounding,” said Don Roose, president of U.S. Commodities.
Feeder cattle futures followed live cattle lower, with losses propelled by technical selling.
January feeders settled down 2.400 cents per pound at 146.625 cents and actively traded March ended down 3.575 at 141.975 cents.
CME lean hog futures ended mixed, with nearby contracts underpinned by strong cash markets and deferred months pressured by rising hog supplies.
Cash hogs in the closely followed Iowa and southern Minnesota market traded $1.60 higher on Friday after gaining $4.14 over the previous two days, according to U.S. Department of Agriculture data.
February hogs settled up 0.050 cent per pound at 71.425 cents. April ended down 0.025 cent at 76.075 cents.