Chicago | Reuters –– U.S. cattle and hog futures fell one per cent or more on Monday, pressured by chart-based and investment fund selling, traders and analysts said.
Lower-than-expected prices in cash cattle markets late last week further weighed on futures, even as rising U.S. wholesale beef prices suggested meat demand remained strong.
Chicago Mercantile Exchange June live cattle briefly declined by their three-cent daily price limit, before settling 2.9 cents lower at 128.35 cents/lb., a more than one-week low (all figures US$). Most-active CME August live cattle was 2.3 cents lower at 121.55 cents, finishing below its 10-day moving average for the first time this month.
“There’s enough people around who don’t think beef prices can hold at these levels,” independent livestock trader Dan Norcini said of the selling in cattle futures.
Wholesale beef already was trading at the highest levels in roughly 23 months and prices added to those gains on Monday, according to the U.S. Department of Agriculture.
But demand generally from retailers generally peaks around this time of year as consumers cook fewer roasts and steaks.
“There’s a seasonal tendency — beef and cattle prices don’t fare well in the heat of the summer,” Norcini said.
CME August feeder cattle futures finished 2.625 cents lower at 151.55 cents/lb., lowest since May 31. Feeders also eased at a cash cattle auction in Oklahoma City, USDA said.
CME June hogs were down 0.5 cent to 81.975 cents/lb. and July hog futures off two cents to 80.7 cents.
“Felt like a lot of fund selling today,” said Rosenthal Collins broker James Burns.
Commodity Futures Trading Commission data released on Friday showed noncommercial investors, a category that includes hedge funds, trimming their net long stake in live cattle futures and increased their net long in lean hogs.
USDA on Monday said 411,000 hogs were slaughtered, down from 440,000 a week ago.
The lower slaughter total indicated that at least one U.S. pork packing plant likely was not slaughtering hogs. There was widespread talk that a facility in Oklahoma was shut down due to a chemical leak but that could not be confirmed. The owner of the plant did not respond to requests for comment.
Cash hogs in the top market of Iowa and southern Minnesota were up $1.21 higher to $77.24/cwt. Wholesale pork prices edged 69 cents higher to $93.14/cwt.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.