Chicago | Reuters — Chicago Mercantile Exchange livestock futures fell on Thursday, as high meat prices are threatening U.S. demand, analysts said.
Concerns that inflation could remain elevated for longer than anticipated weighed on the markets because higher prices could reduce meat sales, analysts said.
Traders also watched a rise in prices for grain used for livestock feed, after a monthly U.S. Department of Agriculture crop report said domestic supplies of wheat and corn are expected to fall in the coming year.
Wheat futures rallied at the Chicago Board of Trade on USDA’s lower-than-expected production forecasts, providing spillover support to the corn market.
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“Today’s report elevated the importance of getting the corn crop planted on time, because we’ve got a much tighter wheat supply that you’re not going to be able to put into the feed rations,” said Mike Zuzolo, president of Global Commodity Analytics.
CME June lean hogs ended down 3.375 cents at 97.475 cents/lb. and hit its lowest price since Jan. 13. July hogs slid by 3.7 cents to close at 97.85 cents/lb. and touched its lowest price since Jan. 12.
June live cattle futures settled 1.925 cents weaker at 131.65 cents/lb. August feeder cattle fell 3.475 cents, to 166.525 cents/lb., and reached their lowest price since Sept. 13.
USDA, in its monthly report, said 2023 cattle prices are forecast above 2022 due to tightening supplies, while hog prices are forecast to be lower amid increased production.
In a separate weekly report, USDA said net export sales of U.S. beef in the week ended May 5 were 28,400 tonnes for 2022, a marketing-year high.
Weekly U.S. pork export sales for 2022 were 6,300 tonnes, up 10 per cent from the previous week and 14 per cent from the prior four-week average, USDA said. U.S. pork exports have struggled this year amid declining demand from China, the world’s biggest consumer of the meat.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Christopher Walljasper.
