Chicago | Reuters — Chicago Mercantile Exchange live cattle futures approached a four-week low on Wednesday as U.S. beef prices declined.
The drop in futures extended a four per cent setback from a contract high that most-active August live cattle reached last month.
Prices for beef shipped to wholesale buyers in large boxes have also weakened, with choice cuts dropping by $1.78, to $284.90/cwt, on Wednesday, according to the U.S. Department of Agriculture (all figures US$). Prices for select cuts fell by $1.23, to $262.08/cwt.
“The beef market is stalled out,” said Don Roose, president of brokerage U.S. Commodities in Iowa. Prices for cash cattle that underpin the futures market have also come under pressure, he said.
CME August live cattle futures ended down 1.8 cents at 120.6 cents/lb. and touched its lowest price since June 11.
Deferred futures contracts have already dialled in a decline in the number of cattle placed in U.S. feedlots, Roose said.
In May, placements in feedlots were down seven per cent from a year earlier, according to the latest data from USDA. The data signals there will be fewer cattle available for slaughter at the end of this year and in early 2022.
“You’re just plain going to have less numbers as we go forward,” Roose said.
CME August feeder cattle settled 1.625 cents lower at 159 cents/lb.
In the pork market, CME lean hog futures for August delivery ended down 1.95 cents at 100.4 cents/lb.
USDA, in a weekly report, said average U.S. hog weights fell slightly to 276.6 lbs. in the week ended July 3. That was down 2.3 per cent from a year earlier.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.