Chicago | Reuters—Chicago Mercantile Exchange (CME) live and feeder cattle futures took a steep dive on technical selling on Tuesday, analysts said, while lean hogs ticked down following cattle’s slide.
CME most-active October live cattle LCV24 closed down 3.425 cents at 175.600 cents per pound. Most-active October feeder cattle FCV24 finished 4.545 cents lower at 231.325 cents per pound.
“The cattle market is just in another technical meltdown that frankly I cannot explain from a fundamental perspective,” said Dennis Smith, a commodity broker and livestock analyst with Archer Financial Services.
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Altin Kalo, head economist at Steiner Consulting Group, said “You look around and it’s not like anything has changed dramatically from the fundamentals.”
Kalo said commodity funds have been reducing their net long positions in cattle. Futures has been in a downtrend for some time, he said, and the feeder cattle followed live cattle on Tuesday in its downward fall.
The approach of Labor Day on September 2, the last major grilling holiday of the season, also weighed on the market, analysts said.
Many market participants are nervous about aggressively buying cattle, analysts said, and will be monitoring Labor Day buying this week ahead of the holiday.
The lean hog market also fell along with the cattle market, analysts said.
Smith said increased hog production helped pressure futures prices.
CME October lean hog futures LHV24 ended down 0.400 cents at 76.400 cents per pound.
