Cattle, lean hog futures fall – CME

Chicago Mercantile Exchange (CME) live and feeder cattle futures fell in a spate of range-bound trading on Friday, with back-month feeder contracts setting new lows as funds shed their positions, informed traders.

The slump came even as wholesale beef prices turned higher. Afternoon boxed beef cutout values increased by $0.51 to $317.45 per hundredweight (cwt) for choice cuts, while select was up $0.56 at $302.59 per cwt, according to US Department of Agriculture data.

Meanwhile, CME lean hog futures followed the cattle market lower, struggling to creep above moving averages on weaker wholesale prices.

“Hogs have been very back and forth,” Darin Fessler, trader at Lakefront Futures, said. “It’ll be very difficult for hogs to be strong without cows being strong. Will consumers also give up pork and go to chicken?”

A flurry of fund selling in cattle markets, and an anticipated increase in slaughter numbers, may also be adding pressure to cattle futures, according to market analysts.

And while inflation has cooled, consumers are pushing back against high prices through bargain hunting, cutting back on purchases and trading down to lower-priced substitutes.

“Overall the ability to go to the restaurants is down. People are watching more closely what they’re spending money on,” Fessler said. “That pullback is what’s really concerning.”

Some traders also watching for consumer reaction to this week’s news that the US bird flu outbreak in dairy cattle is believed to be much larger than official figures suggest, and that US Department of Agriculture plans to expand bird-flu testing of beef entering the food supply.

CME most-active October live cattle closed down 2.45 cents at 178.3 cents per pound. Most-active October feeder cattle finished 4.95 cents lower at 235.95 cents per pound.

CME October lean hog futures ended down 1.425 cents at 75.075 cents per pound.

Tags: feeder cattle, CME, prices, Beef, lean hog, futures, live cattle, Chicago Mercantile Exchange