U.S. livestock: CME live cattle futures decline after weaker cash trade

Chicago | Reuters – U.S. live cattle futures declined on Thursday after cash cattle traded in Kansas and Texas at mostly lower prices than a week ago, traders said.

CME Group feeder cattle futures edged higher while lean hog futures ended mixed, with the nearby October contract down more than 2 cents per cwt, or 4.5 percent.

Cattle were pressured by news that slaughter-ready cattle fetched $109 per cwt in Texas and Kansas, down from $109 to $110.50 last week.

“Beef (prices are) holding well and we’ve had good exports, so there has got to be a reason why the packer can buy cattle cheaper. I think it’s because there are a lot of cattle around,” one analyst said.

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CME August live cattle futures ended down 0.275 cent at 107.950 cents per pound. The most-active October live cattle contract fell 0.175 cent to 108.725 cents.

CME August feeder cattle futures rose 0.325 cent to settle at 149.025 cents per pound and September feeders were unchanged at 149.150 cents.

The U.S. Department of Agriculture reported export sales of U.S. beef in the latest week at 20,600 tonnes, the second-highest total since early June.

Traders await the USDA’s Cattle on Feed report on Friday. Analysts surveyed by Reuters on average expect the government to report a year-on-year increase in the number of cattle on feed as of Aug. 1.

Most-active CME October lean hog futures settled down 2.425 cents at 51.175 cents per pound and December fell 0.800 cent at 50.875 cents.

Traders also awaited news from U.S. trade talks with China, a key buyer of U.S. pork. After the close, the White House said negotiators concluded two days of discussions and discussed “how to achieve fairness, balance, and reciprocity in the economic relationship, including by addressing structural issues in China.”

Meanwhile, China, home to the world’s largest pig herd, reported its fourth outbreak of the deadly African swine fever, with more than 400 pigs infected as the disease entered a fourth province, fanning worries about its rapid spread.

The spread of the disease “opens the door for the possibility of massive pork imports next year, but it also opens the door for the possibility of significant soybean demand destruction in the world’s largest importer,” INTL FCStone chief commodities economist Arlan Suderman said in a client note.

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