Chicago | Reuters — Live cattle futures dropped to their lowest level in more than a week at the Chicago Mercantile Exchange on Monday on concerns about the risk for easing demand for U.S. beef.
Feeder cattle futures also declined, while lean hog futures ended higher.
Lower-than-expected cash cattle prices last week contributed to uncertainty over consumer demand, traders said.
Cash cattle last week traded at about $185/cwt in Kansas, Texas and Nebraska, which was generally about steady from the previous week (all figures US$). Traders had been expecting higher cash prices.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Cash and futures prices for cattle had climbed this year after producers reduced the size of the U.S. herd to its lowest in decades.
“It seems to me that the mood has shifted away from the bullish supply side data and more towards the demand side of the equation, which many believe is going to suffer due to the higher price of beef and perhaps fears of recession,” said Dan Norcini, an independent livestock trader.
CME December live cattle futures settled 2.55 cents lower at 181.325 cents/lb., and February live cattle ended 3.25 cents lower at 181.975 cents. Both contracts hit their lowest prices since Oct. 27.
January feeder cattle settled 3.325 cents lower at 236.425 cents/lb.
Wholesale beef prices declined. The U.S. priced select cuts of beef at $270.36/cwt, down $1.65, and choice cuts at $301.72/cwt, down 62 cents.
In the wholesale pork market, the government priced pork carcasses on at $91.61/cwt, up $4.33, as belly prices soared.
CME December lean hog futures settled 0.65 cent higher at 72.4 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
