U.S. livestock: CME live cattle fall again on lower beef, cash prices

Chicago | Reuters –– U.S. live cattle futures fell on Friday, with the actively traded Chicago Mercantile Exchange (CME) June contract down for a 10th straight session on sinking beef and cash cattle prices, and long liquidation by managed commodity funds.

Cattle futures have been susceptible to steep drops as commodity funds had recently built up a record-large net long position in the market.

June live cattle ended down 0.25 cent at 113.425 cents/lb., its lowest since Dec. 4 (all figures US$). August cattle ended down 1.025 cents at 109.15 cents/lb.

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A counter-seasonal slide in cash beef prices and lower cattle prices at U.S. Plains feedlot markets helped to fuel the downward momentum in live cattle futures.

“Wholesale beef prices are going down at a time when they should be recovering from Easter weakness. This is normally a strong time for beef going into Memorial Day,” said Doug Houghton, analyst with Brock Associates.

“There are less concerns about feedlot cattle supplies. They look like they’re going to be ample well into the fall,” he said.

Chilly, rainy weather around a large swathe of the country has limited demand for beef for outdoor grilling this spring.

The U.S. Department of Agriculture (USDA) quoted the choice boxed beef cutout on Friday at $227.36/cwt, down $1.44 from Thursday and $5.63 from a week ago. The select cutout fell $1.79, to $213.29, down $6.12 from a week ago.

Feedlot cattle traded from $122 to $124/cwt in the central and southern Plains this week, down from around $126-$127 a week earlier, according to USDA data.

Feeder cattle futures followed live cattle lower, with additional pressure from rising feed prices, including Chicago Board of Trade corn futures which climbed 2.6 percent this week.

August feeder cattle were down 1.525 cents at 146.375 cents and September was down 1.35 cents, at 147.15.

Lean hog futures ended mostly higher, lifted by expectations for accelerated U.S. pork imports by China, where the domestic hog herd has been ravaged by African swine fever.

But U.S. pork shipments have been impeded by steep Chinese import tariffs, imposed as part of a trade war between the two countries.

U.S. President Donald Trump said on Friday trade negotiations are going well. Talks will move from Beijing to Washington next week.

CME June lean hogs ended unchanged at 92.75 cents/lb. while July futures were up 0.15 cent at 95.675 cents.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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