Chicago | Reuters — Live cattle futures trimmed on Thursday as fears of additional pandemic closures weighed on the demand outlook, traders said.
Chicago Mercantile Exchange February live cattle futures fell 1.35 cents to 112.575 cents/lb., the contract’s biggest decline in two weeks (all figures US$).
CME January feeder cattle ended two cents lower at 139.8 cents/lb., its biggest drop since Nov. 18.
Renewed stay-at-home orders in major metropolitan areas shook cattle markets, even as consumer demand for beef has remained strong.
“When you have cattle and uncertainty in the markets,” said Joe Kooima, commodity broker with Kooima and Kaemingk Commodities Inc., “the cattle don’t react very well.”
Cash cattle trade in the southern Plains dipped back to $110/cwt, after climbing to $112 on Wednesday, according to the U.S. Department of Agriculture.
Softer beef export sales also added pressure. USDA reported net sales of U.S. beef in the week to Nov. 26 at 13,700 tonnes, down 16 per cent from the prior four-week average, primarily to Japan, South Korea and Mexico.
Retailers stocked up on meat and other essentials as COVID-19 cases climbed this fall, hoping to avoid shortages seen when the pandemic began. But as Americans tempered panic buying, grocery stores found themselves already stocked for the holiday season — normally a time of strong beef demand, Kooima said.
“Holiday stuff is probably already in the store,” he said. “They just wanted to make sure they were better prepared this time, that they had stuff on supply, as compared to scrambling last time.”
Boxed beef prices fell for a second day, with choice cuts dropping $1.70, to $239.19/cwt, and select cuts dropping $3.02, to $219.93.
CME’s benchmark February lean hog futures contract settled 0.95 cent lower at 66.925 cents/lb.
Weekly export sales of U.S. pork totaled 31,300 tonnes, USDA said, up 66 per cent from the previous week but down six per cent from the prior four-week average, with Mexico buying 12,900 tonnes while China booked 7,400 tonnes and shipped 9,000 tonnes.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.