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CME: Cattle Market Continues to Struggle; Pork Values Likely to Stay Strong

18 June 2013

US - "It was the best of times. It was the worst of times." Thus began Dicken’s A Tale of Two Cities and it timeless story of love, devotion, betrayal and turmoil. While saying that today is either the best or worst of times for either the beef or pork businesses is somewhat of a stretch, the phrase aptly conveys the contrasts of the two markets in the past few weeks, write Steve Meyer and Len Steiner.

The charts below show the stark differences in Live Cattle and Lean Hogs futures since March. The top chart is June Live Cattle (which are still on the board) and the bottom is June Live Hogs (which expired on Friday). Both began falling just after the beginning of the year and the Live Hogs complex declined rapidly as the impact of Russia’s ban on US pork and the ractopamine-free certification requirements in China took effect. The Russian ban, of course, hit beef as well. Lean Hogs bottomed out in early April and have made a dramatic climb since early May with the June contract going off the board at a life-of-contract high $102.30 on Friday. USDA’s estimated pork cutout value has gained over $20/cwt in just ten weeks and last week’s average of $100.76/cwt. is the 6th highest weekly average ever, trailing only five weeks at the end of July and beginning of August in 2011.

LEM - June Live Cattle

HEM - June Lean Hogs

Meanwhile, the cattle market continues to struggle in spite of recent record-high Choice cutout values and Select cutout values that last week were very near the r

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

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