LIVESTOCK-CME cattle futures hit October highs on tight US supply

By Tom Polansek

CHICAGO, Jan 6 (Reuters) - Chicago Mercantile Exchange cattle futures on Tuesday touched their highest prices since October on strong cash prices and expectations that U.S. supplies will remain tight this year, analysts said.

Traders projected that Washington will continue to block U.S. imports of Mexican cattle following recent detections of New world screwworm in animals in Mexico. The U.S. has largely blocked imports of Mexican livestock since May 2025 in a bid to keep out the flesh-eating parasite.

"There's ideas that they won't resume anytime soon based on the most recent screwworm cases last week," said Doug Houghton, analyst for Brock Associates.

CME March feeder cattle futures FCH26 jumped 3.450 cents to end at 359.025 cents per pound and hit the highest level since October 23.

CME February live cattle futures LCG26 advanced 0.750 cent to 236.625 cents per pound. The contract matched its high from Monday, which was the highest price since October 24.

Cash prices have also been strong to start the year, brokers said.

High prices have hurt profit margins for meatpackers, which must pay more to buy cattle to process into steaks and hamburgers. Packers were losing an estimated $262.60 per head of cattle they slaughtered on Monday and $229.75 per head on Tuesday, according to livestock marketing advisory service HedgersEdge.com.

In CME's lean hog market, February futures LHG26 closed 0.475 cent lower at 85.675 cents per pound. The market eased after rising on Monday to an October high.

"They probably ran out a little bit more than they needed to yesterday," Houghton said.

The U.S. hog herd on December 1 totaled 75.5 million head, up about 1% from a year earlier, according to U.S. Department of Agriculture data issued last month.