US Beef, Pork Stocks Rise as Port Dispute Ends

Posted by Michelle Howard February 23, 2015

Chicago Mercantile Exchange live cattle futures will likely edge upward on Monday on short-covering and last weekend's West Coast labor dispute agreement, traders said.

Cargo loading and unloading resumed full operations on Saturday after shipping companies and union dock workers reached a tentative deal late on Friday.

It could take several weeks to clear the backlog, which includes meat, an analyst said.

Still, investors should view the news as bullish, which may help neutralize two mildly bearish U.S. Department of Agriculture reports last Friday, he said.

Friday's USDA cold storage report showed weak demand on the U.S. West and East Coasts boosted pork and beef stocks to their highest levels in years.

A separate government report showed the number of cattle placed in U.S. feedlots in January was slightly higher than expected.

Friday's firm wholesale beef values and futures' discount to last week's cash prices, even though they were lower, might encourage buyers, a trader said.

Last week, market-ready, or cash, cattle in Kansas and Nebraska sold at $158 to $160 per hundredweight (cwt), down as much as $4 from the prior week, they said.

CME live cattle futures' recent losses and poor packer margins discouraged processors from spending more for supplies, said traders and analysts.

Grocers bought beef to avoid a supply shortage as cattle numbers decline seasonally, they said.

FEEDER CATTLE - Seen opening mixed.

CME feeder cattle may feel pressure from follow-through selling, but supported by potential live cattle market gains.

LEAN HOGS - Called higher.

Ramped up West Coast port shipments could lift CME lean hog contracts on Monday, traders said.

But last Friday's mixed, rather than higher, cash hog prices and that day's lower wholesale pork values could limit potential futures advances, they said.

CME lean hogs are overpriced based on the exchange's hog index for Feb. 19 at 60.27 cents, which could deter buyers.

West Coast dock delays are no longer an issue, but investors are monitoring extremely cold temperatures in the eastern half of country, which have hurt meat demand, particularly at restaurants.