CHICAGO, March 18 (Reuters) – Chicago Mercantile Exchange feeder cattle futures fell on Wednesday as Chicago Board of Trade corn futures gained strength.
Live cattle gave up some of Tuesday’s gains before settling slightly higher, with a meatpacking plant on strike and dry weather and fires in Nebraska further tightening historically low cattle numbers.
CBOT corn futures climbed on Wednesday following crude oil prices, which rose more than 5% on Wednesday after Iran’s Revolutionary Guards threatened to attack several energy facilities across the Middle East, heightening the risk of further disruptions to energy supplies in the region.
Strength in crude oil is seen as supportive given corn’s role as a feedstock for ethanol. However, rising corn prices also makes feeding cattle more expensive, supporting feeder cattle futures, according to Karl Setzer, co-founder of ConsusAg Consulting.
Meanwhile, workers have gone on strike at a large JBS meatpacking plant in Greeley, Colorado, which is likely to reduce U.S. beef production at a time when consumers face record prices for beef.
CME April live cattle settled 0.175 cents higher at 235.4 cents per pound. April feeders finished down 1.075 cents at 358.725 cents per pound.
Meanwhile, dry weather and fires in pasturelands of Nebraska could displace tens of thousands of head of cattle and spur ranchers to slaughter parts of the herd they have been working to rebuild, according to analysts.
Beef packer margins rose to $142.15 per head on Wednesday, up from gains of $128.90 on Tuesday, and losses of $10.45 a week ago, according to livestock marketing advisory service HedgersEdge.
CME lean hog futures ended up 0.025 cent at 93.75 cents per pound. (Reporting by Renee Hickman; Editing by Shailesh Kuber)
