U.S. livestock: Cattle tumble, hogs decline on liquidation after Brexit

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– U.S. live cattle tumbled more than two per cent on Friday, extending the week’s losses to the largest in about two months, as investors liquidated holdings following Britain’s referendum vote to exit the European Union, traders and analysts said.

Feeder cattle futures also fell sharply while lean hogs notched smaller declines at the Chicago Mercantile Exchange. Selling in each contract came ahead four U.S. Department of Agriculture livestock reports due at 2 p.m. CT.

“Obviously this is a risk-off day, with what we have going on in equity and energy markets,” said Craig VanDyke, analyst at brokerage Top Third Ag Marketing. “This has nothing to do with supply and demand (of cattle or hogs).”

Equities were on pace for their largest daily losses in months, weighing on cattle prices as consumers may reduce purchases of luxury goods such as pricy steaks due to poorer returns in stock markets. The dollar also surged against a basket of currencies, making U.S. commodities less competitive in global markets.

Most-active CME August live cattle settled 2.975 cents lower at 110.875 cents/lb., bringing the week’s losses to 2.6 per cent, the most since April. The contract briefly declined by its daily limit of three cents.

CME August feeder cattle eased 2.925 cents to 139.45 cents/lb. Feeders gained 1.5 per cent for the week, snapping what had been a three-week run of declines.

Lean hogs for August delivery settled 0.475 cent lower at 84.975 cents/lb. The weekly drop of 4.7 per cent was the largest in the lifetime of the contract.

USDA was set to release quarterly Hogs and Pigs, monthly Cattle on Feed and Cold Storage reports as well as a longer-term cattle overview.

— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago.

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