Chicago | Reuters — U.S. cattle futures eased on Wednesday and hog futures were mostly lower on ample livestock supplies and concerns about rising coronavirus infections and their negative impact on the economy.
Wall Street’s three major indexes tumbled on Wednesday and crude oil plunged more than five per cent as a surge in U.S. coronavirus cases intensified fears of another round of government lockdowns and worsening economic damage.
Meatpackers, meanwhile, are still working to whittle down excess supplies that arose when numerous packing plants were temporarily closed due to coronavirus outbreaks among workers.
A quarterly U.S. Department of Agriculture (USDA) report due for release on Thursday is expected to show a 3.7 per cent expansion of the U.S. hog herd in the March-to-May quarter.
Livestock markets slumped as rising infection rates were seen slowing the reopening of restaurants and food service businesses, key outlets for items like bacon and high-end cuts of beef.
“We have a decent-sized backlog of cattle to work through that’s keeping a lid on things, and there’s no real excitement in the boxed beef market,” said Matthew Wiegand, a broker with FuturesOne. “Hog-wise, the concern is that we still have too many ready hogs.”
Chicago Mercantile Exchange July lean hogs fell to within 0.1 cent of a contract low posted on Monday and settled 0.975 cent lower at 45.925 cents/lb. (all figures US$). Actively traded August hogs dropped 1.25 cents, to 51.25 cents/lb.
August live cattle were 0.85 cent lower at 96.35 cents/lb. and August feeder cattle shed 0.325 cent to close at 132.875 cents/lb.
Wholesale boxed beef prices fell for a second straight day, nearing pre-pandemic levels following a spike to record highs. Pork prices bounced after a month-long slide from historic highs.
Meatpackers are facing heightened scrutiny after the unprecedented meat price surges.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.