Chicago Mercantile Exchange (CME) live cattle futures consolidated on Friday after setting a string on contract highs recently, while lean hog futures eased, reported Reuters.
The cattle market looks ripe for a correction after futures rose this month on tightening US supplies, brokers said. However, cattle inventories look even smaller than expected as ranchers have reduced their herds due to high feed prices and drought in the western United States, they said.
There were 11.7 million cattle and calves on feed for slaughter as of Feb. 1, down 4.1% from a year earlier, the US Department of Agriculture (USDA) said in a monthly report. Analysts surveyed by Reuters were expecting a 3.5% decline.
Placements of cattle in feedlots during January were 3.6% below a year earlier, the USDA reported. Analysts expected a 2.9% drop.
"Tighter cattle numbers will be a regular occurrence in 2023 and beyond," Rabobank said in a note. "Drought and four years of herd liquidation have taken a toll."
Click here to see more...