Chicago | Reuters — Chicago Mercantile Exchange (CME) livestock futures slid on Friday as grain futures rallied, underpinned by strong commodities and equities markets, brokers said.
The downward trend started when live cattle markets took a hit earlier in the day, when the feeder cattle traders began selling off their positions as corn futures firmed on the weakening dollar, said Dan Norcini, an independent livestock trader.
Then, the U.S. Department of Agriculture reported a “pretty big hit on choice and select beef cut-out prices,” Norcini said.
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In the U.S. wholesale beef market, choice cuts were priced at $259.55 per hundredweight (cwt), sharply down from $263.27 on Thursday. Select cuts also fell $1.64, to $235.19/cwt, according to U.S. Department of Agriculture data released early Friday (all figures US$).
Margins for beef processors also fell to $75.50 per head of cattle, down from $85.35 on Thursday and $85.80 a week ago, livestock marketing advisory service HedgersEdge.com said.
“It’s really surprising that cattle was down today, because you would think it would have responded to the broader market rally,” Norcini said. “But there is still a sense in the trade that consumers are going to be trading down at the meat counter.”
December live cattle settled 1.55 cents lower at 151.525 cents/lb. February live cattle fell 1.775 cents to 153.25 cents/lb.
Feeder cattle futures also fell, with the most-active January contract settling down 3.125 cents at 178.575 cents/lb., the lowest price since Nov. 1.
In hog futures, CME December lean hogs eased 0.525 cent to close at 84.35 cents/lb.
On Friday, meatpackers slaughtered an estimated 120,000 cattle, down from 125,000 a week earlier and up from 117,000 cattle a year ago, USDA said. Hog slaughtering fell to an estimated 450,000 head from 468,000 hogs a week ago and 482,000 a year ago.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.
