Chicago | Reuters — U.S. live cattle futures dropped to their lowest price in more than a month on Friday, weighed down by expectations for increasing meat production.
Beef output has improved as slaughterhouses have resumed operations after closing temporarily in April and May due to outbreaks of the new coronavirus among plant workers.
The U.S. Department of Agriculture, in a monthly report on Thursday, raised its estimate for 2020 beef production by 3.5 per cent from May to about 26.74 billion pounds.
“I’m looking for downward pressure in the cattle,” said Dennis Smith, commodity broker for Archer Financial Services in Chicago.
USDA estimated on Friday that meat processors slaughtered 582,000 cattle so far this week, up from 573,000 cattle over the same period last week. The total is down from 606,000 cattle slaughtered a year earlier, according to agency data, as some plants are running at reduced capacities.
Boxed beef prices still eased as production recovered, with choice cuts dropping by $5.60 to $229.96/cwt, according to USDA.
“The beef is still working downwards,” Smith said.
Chicago Mercantile Exchange August live cattle slid 1.125 cents, to 95.325 cents, and reached its lowest price since May 6. August feeder cattle futures ended 1.075 cents weaker at 131.1 cents/lb.
In the pork market, CME July lean hog futures, the most actively traded contract, slid 0.45 cent to 51.675 cents/lb. August futures dropped 0.225 cent, to 54.65 cents.
Hog prices have come under pressure from improving production, although some traders said the market looks oversold and due for a rebound.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.