Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended lower on Thursday, with the most-active contract hitting its lowest price since July, as the market continued to retreat from recent highs.
Futures and cash prices have jumped this year after drought reduced the amount of pastures available for grazing and prompted U.S. cattle producers to reduce their herds.
The increase in cash prices has left meat packers losing money on each head of cattle they slaughter, raising fears among traders that processors’ demand for the animals could decline, said Don Roose, president of brokerage U.S. Commodities.
Read Also
U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
“We’re in our tightest numbers right now,” Roose said about the herd.
Most-active October live cattle slipped 0.95 cent to finish at 178.325 cents/lb. at the CME and hit its lowest price since July 31 (all figures US$). The market has pulled back since hitting a contract high of 185.75 cents/lb. on July 20.
CME September feeder cattle ended down 1.875 cents at 247.125 cents/lb.
Meat packers lost an estimated $23.20 per head of cattle on Thursday, compared with losses of $63.20 per head a week ago, according to HedgersEdge.com.
The U.S. Department of Agriculture said values for choice cuts of boxed beef jumped by $5.15 from Wednesday, to $314.14/cwt. Select cuts of boxed beef rose $1.49, to $286.26/cwt.
USDA on Friday is expected to report that there were about 1.6 per cent fewer cattle on feed for the slaughter market as of Aug. 1 than a year earlier, analysts said.
In demand news, USDA said net export sales of U.S. beef in the week ended Aug. 10 were 15,100 metric tonnes for 2023. That was down 13 per cent from the prior four-week average.
For pork, weekly U.S. export sales of 28,700 tonnes for 2023 were up 36 per cent from the prior four-week average.
Most-active CME October lean hog futures rose 0.975 cent to 79.15 cents/lb., a day after touching their lowest price since June 30.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
