Cattle and Hog Markets Rebound Amid Global Market Recovery

The Chicago Mercantile Exchange saw live cattle and feeder cattle futures prices increase on Tuesday, March 31, 2009, as the stock market and other outside markets recovered from Monday's losses. Lean hogs also finished higher, mostly due to month-ending short covering and technical support. Analysts and brokers attributed the rebound to supportive grain and soybean markets, indicating overall health in commodity markets. However, traders remained concerned about beef demand, with some saying reported gains by the U.S. Department of Agriculture were insufficient to support higher cash and futures prices.

Key Takeaways:

• Live cattle futures prices rose 110 points to 83.92 cents a pound in April, and June added 2.04% in value to end up at 81.70 cents.
• Feeder cattle futures closed 97 points higher at 93.17 cents in April, and May was 120 points higher at 94.25 cents.
• Brokers attributed the rebound to higher grain and soybean markets, indicating overall health in commodity markets.
• Traders feared a late rally in corn, which was just what happened, but higher live cattle prices tended to overcome the higher corn prices.
• The cattle markets have been trading in a sideways pattern, with some analysts calling for prices to be forced up another $1 per hundredweight this week.
• Lean hogs rebounded from early lows and pushed May and June up to triple-digit gains on the closing bell, with June leading all gains at 142 points higher.
• Firmer technical indications and bullish seasonal trends contributed to the gains in hog futures.
• Higher corn prices were seen as supportive for hog futures, encouraging producers to sell their hogs at lighter weights.

Statistics:

• April cattle futures rose 110 points to 83.92 cents a pound.
• June cattle futures added 2.04% in value to end up at 81.70 cents.
• Lean hogs finished mostly higher, with May gaining 140 points to close at 72.05 cents and June finishing at 72.40 cents.
• The nearby month (April) was the only contract to close lower, giving up 20 points to finish at 60.35 cents a pound.
• May hog futures gained 142 points to close at 72.40 cents.
• May pork belly futures posted a 3.3% gain on the day, closing up 280 points at 86.55 cents.
• July and August pork belly futures each closed up the 300-point daily limit at 83.55 and 83.50 cents, respectively.

Sources:

• Dow Jones Commodities News via Comtex
• Dow Jones Newswires
• Comtex SmarTrend Alert (automated pattern recognition system)
• Comtex News Network, Inc.
• U.S. Department of Agriculture