U.S. livestock: Cattle tumble in technical selloff after contract highs

Chicago | Reuters — U.S. live cattle futures fell more than one per cent on Tuesday, reversing from earlier life-of-contract highs on pressure from investment fund and technical selling, traders and analysts said.

Feeder cattle futures declined by their daily price limit of 4.5 cents/lb. while lean hog futures were mostly one per cent higher (all figures US$).

Cattle prices were buoyed in recent weeks by rising wholesale beef prices and lower cattle weights — factors that suggested strong demand. But beef prices typically trend lower in the early summer months as retailer buying slows.

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Uncertainty surrounding top global beef processor JBS SA also triggered profit-taking in cattle futures, the traders said.

“This was a healthy market correction,” a cattle trader in Chicago said.

Chicago Mercantile Exchange June live cattle fell 1.9 cents to 130.2 cents/lb. Most-active CME August live cattle were down 2.6 cents, to 123.6 cents/lb., after touching a contract high of 127.65 cents.

CME August feeder cattle declined 2.7 per cent to finish at 155.375 cents per pound, reversing at midday amid heavy selling.

JBS sells beef plants  

JBS announced a sale of its meat plants in Argentina, Paraguay and Uruguay to rival Minerva SA amid a scandal in which JBS admitted to paying politicians bribes.

JBS has beef plants in Texas, Nebraska, Michigan and Wisconsin. A U.S. cattle industry group, R-CALF, also released a letter asking President Donald Trump to investigate JBS’ business in the U.S.

The U.S. Department of Agriculture after the close of futures trading said choice-grade wholesale beef was up $2.10, to $250.45/cwt, its highest in more than a year. Wholesale pork eased 93 cents, to $90.25/cwt, USDA said.

Lean hogs futures gained in a rebound from losses on Monday. Prices continued to trend sideways near last week’s multimonth highs, with strong pork demand met by abundant hog supplies.

CME June hogs were up 0.925 cent to 81.65 cents/lb. and most-active July hog futures up 0.95 cent to 81.375 cents.

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

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