Chicago | Reuters — Live cattle futures fell on Friday as a third day of softer wholesale beef prices brought retailer demand into question, traders said.
“Wholesale beef prices appear to have topped again and could head lower into the holidays, other than some late buying by retailers last minute,” said Doug Houghton, technical analyst at Brock Capital Management.
Chicago Mercantile Exchange February live cattle futures fell 0.175 cents to 112.4 cents/lb., its lowest close since Nov. 20 (all figures US$).
For the week, CME’s most active live cattle futures contract fell 0.85 cent.
Boxed beef prices have been declining for much of the week, with choice cuts falling $4.17, to $235.02/cwt, on Friday, down from $242.85 a week ago, and select cuts trimming $2.42 to $217.51/cwt, a retreat from $220.68 last week.
Heavier supplies of market-ready beef could add pressure to cattle futures in the first quarter of 2021, Houghton said, as higher numbers of cattle placed in feedlots during the summer come ready for slaughter.
“After the spring, when all the cattle got backed up because of COVID and they didn’t go into feedlots,” he said, “the whole supply cycle has been disrupted.”
CME feeder cattle futures closed narrowly mixed, with the most-active January contract down 0.025 cent at 139.775 cents/lb., ending the week 0.05 cent lower.
Meanwhile, hog futures fell for a third straight session as pork production remains high.
“This is the time when slaughter should be peaking. That puts pressure on the front-end contracts,” said Houghton.
CME’s benchmark February lean hog futures contract settled 0.35 cent lower at 66.575 cents/lb., after falling to 64.6 cents/lb., its lowest since Nov. 20.
For the week, lean hog futures dipped one per cent, after two consecutive weeks of gains.
Hog slaughter remains strong, with 491,000 head processed Friday and an nearly 2.8 million head slaughtered this week, just 15,000 short of the same week last year.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.