Chicago | Reuters—Technical selling, fund liquidation and demand concerns drove Chicago Mercantile Exchange cattle futures to multi-month lows on Friday, analysts said.
Jitters over the spread of bird flu in dairy herds continued to hang over the markets, although the virus has not been detected in beef cattle.
The U.S. Department of Agriculture confirmed cases in dairy cattle in North Carolina and South Dakota this week, expanding the outbreak to eight states since the first detection in a herd in Texas on March 25. Traders worry the infections could threaten demand for beef and dairy products since both come from cattle.
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“The biggest problem the cattle markets have right now is the headline risk from the avian influence across the dairy cows and the unknown of what’s to come,” said Ross Baldwin, hedge strategist at AgMarket.Net.
Analysts added that stubbornly high U.S. inflation also raised concerns that beef demand may suffer due to high prices.
CME June live cattle LCM24 ended down 2.425 cents at 171.475 and hit the lowest price since Jan. 9. The contract eased 0.3 per cent for the week, its fourth consecutive weekly decline.
CME May feeder cattle FCK24 ended down 3.95 cents at 234.2 and hit its lowest price since Dec. 26. The contract slid 1.7 per cent for the week in its seventh straight weekly loss.
“The feeder chart is extremely ugly,” Baldwin said.
Lean hog futures also ended weaker in a setback from contract highs this week. CME June lean hogs LHM24 tumbled 3.725 cents at 102.075 cents per pound and hit the lowest price since April 1. The contract sank 5.4 per cent this week.
