Chicago | Reuters – U.S. cattle futures fell on Thursday in a turnaround from multi-month highs reached the previous session.
Chicago Mercantile Exchange (CME) December live cattle ended 1.075 cents lower at 117.225 cents per pound after reaching 118.600 cents on Wednesday, its highest since April 25.
CME most-active January feeder cattle futures slipped 0.125 cent to 144.675 cents per pound after jumping on Wednesday to 144.975, its highest since May 21.
A bout of profit-taking weighed on the markets, traders said, although prices could still climb higher.
“We can’t say this is a definitive top,” said Rich Nelson, chief strategist for broker Allendale in Illinois. “Fundamentals are still strong, and cash cattle are still moving.”
Cash cattle traded as high as $112 per cwt on Wednesday, according to the U.S. Department of Agriculture, up from about $110 last week.
The USDA said separately on Thursday that export sales of U.S. beef for delivery in 2019 were 15,700 tonnes from Oct. 18-24. That was up 14 percent from the previous week.
Export sales of U.S. pork for 2019 delivery were 30,100 tonnes during the same period, according to the USDA. That was up 57 percent from the previous week but down 68 percent from the prior four-week average.
China has ramped up total imports of pork as its domestic prices soar following outbreaks of African swine fever which has devastated the world’s largest hog herd. It is buying U.S. pork even with a 72 percent tariff on imports.
But China bought just 1,900 tonnes of U.S. pork for 2019 delivery last week and canceled purchases of 4,200 tonnes of pork for 2020 delivery, the USDA said in its weekly export sales report.
Weak sales to China in the past two weekly reports are a concern because the U.S. hog herd is at an all-time high, Nelson said.
“We need consistent sales to China through the fourth quarter to alleviate this record production level,” he said.
American pork producers face a disadvantage in China because Beijing imposed a 72 percent tariff on imports from the United States as part of the countries’ ongoing trade war.
U.S. President Donald Trump said the United States and China would soon announce a new site where he and Chinese President Xi Jinping will sign a “Phase One” trade deal after Chile canceled a planned summit set for mid-November.
CME December hogs ended up 0.225 cent at 66 cents per pound.