Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended flat to lower on Monday on larger-than-expected feedlot placements in May and expectations for slower demand for beef for outdoor grilling following the U.S. Independence Day holiday.
Sharply higher feed corn prices early in Monday’s trading session weighed on the live and feeder cattle prices from the open, but the livestock markets recovered most losses once corn retreated from the day’s highs.
Live cattle, however, remained anchored by expectations for greater supplies in the pipeline after the U.S. Department of Agriculture said in a monthly report that May feedlot placements were up five per cent from a year earlier. Traders had expected a mere 1.7 per cent increase.
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Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.
“The cattle on feed report came in a little bit hotter than expectations,” said Matthew Wiegand, commodity broker for FuturesOne.
“Seasonally, cattle numbers are getting a bit bigger, boxed beef demand has been more lackluster lately and we’re eight days out from the last good grilling holiday,” he said.
The benchmark CME August live cattle contract settled down 0.175 cent at 170.6 cents/lb. (all figures US$). October futures were down 0.475 cent at 174.025.
August CME feeder cattle ended down 0.275 cents at 233.675 cents/lb. after touching a low of 231.4 earlier in the session.
CME lean hog futures firmed on Monday on rising wholesale pork prices and tight supplies of hogs.
July hogs added 2.125 cents to settle at 93.4 cents/lb. while most-active August gained 0.375 cent to close at 90.05 cents/lb.
The hog and cattle slaughter is likely to be slightly larger than normal this week as meat processing plants prepare to go idle around the Independence Day holiday next Tuesday. Slaughter schedules will also be ramped up late next week to make up for the holiday downtime.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
