Chicago | Reuters – CME live and feeder cattle futures stumbled on Thursday, breaking a three-day rally under pressure from a strike authorization vote at a JBS meatpacking plant in Greeley, Colorado, analysts said.
However, bullish fundamentals, including a tight cattle supply and the ongoing closure of the southern border to Mexican cattle imports, will continue to add strong support to prices.
CME April live cattle LCJ26 finished 5.275 cents lower at 535.25 cents per pound, while March feeder cattle FCH26 finished 6 cents lower at 364.075 cents per pound.
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Workers at a the Greeley JBS beef plant authorized a strike after the close of trade on Wednesday, though it is unclear whether a strike will actually take place.
“We have been bargaining for eight months and JBS has prevented us from reaching a contract as a result of their Unfair Labor Practices. They continue to increase chain speeds and create dangerous working conditions all while reducing hours for workers. At the same time, the company is insisting on being able to steal workers’ pay through improper wage deductions. JBS has left us no alternative but to authorize a strike. Enough is enough,” said Leticia Avalos, a JBS worker in a press release.
A strike at the plant would likely depress cash cattle prices, which would in turn weigh on futures.
“It would be moderately important, but it’s one plant. It wouldn’t take more than two or three bucks out of cash cattle at most. It’s something of a concern but we have some skepticism over how successful they will be,” said Rich Nelson, director of research at Allendale.
Hog futures ended little changed, though strong demand for pork and a tight hog herd provided a floor on prices.
CME April lean hogs LHJ26 settled 0.70 cent lower at 98.45 cents per pound.
The USDA priced choice boxed beef ticked 77 cents lower at $367.25 per hundredweight (cwt) as of Thursday afternoon, and select boxed beef fell $1.72 to $360.37 per cwt.
