Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed lower Monday on concern that supplies might outstrip demand ahead of the U.S. Memorial Day holiday-shortened work week, traders said.
Packers bought fewer cattle last week which may have compounded the seasonal supply increase, they said.
Cattle numbers are sufficient as grocers and restaurants buy beef hand-to-mouth until they can determine how much of it cleared meat cases over the upcoming three-day holiday weekend.
Monday morning’s choice wholesale beef price rose $1.03 per hundredweight (cwt) from Friday to $262.96 (all figures US$). Select cuts gained 62 cents to $251.72, USDA said.
CME live cattle contracts ended up from session lows helped by their discounts to last week’s cash prices.
A week ago, a small number of market-ready (cash) cattle, in the U.S. Plains fetched $160 to $161, versus $161 to $164 the week before, according to industry sources.
Uncertainty regarding U.S. reaction to the WTO’s ruling that meat labeling rules hurt Mexico and Canadian exports further weakened CME livestock futures.
“I think the futures trade sees this ruling as a defeat to potentially curbing meat imports headed for the U.S. consumer,” said Global Commodity Analytics president Mike Zuzolo.
June closed 0.95 cent/lb. lower at 151.575 cents, and August down 0.775 cent, to 150.025 cents.
Technical selling and CME live market losses undermined the exchange’s feeder cattle contracts.
May closed down 0.025 cent/lb. to 218.975 cents, and August 1.675 cents lower at 216.725 cents.
Hogs fall with cash prices
CME lean hogs ended lower on sell stops, the morning’s cash price retreat and initial live cattle market liquidation, traders said.
June closed down 0.95 cent, to 82.4 cents, and July 1.2 cents lower at 82.725 cents.
USDA reported Monday morning’s average cash hog price in Iowa/Minnesota dropped $1.70/cwt from Friday to $80.11.
Plant shutdowns during Monday’s holiday will limit packer needs for supplies, traders and analysts said.
Separate government data quoted the morning’s wholesale pork price at $84.16 per cwt, 68 cents higher than on Friday.
Pork demand may start to cool a bit at the current price level because it is not the bargain it was six or eight weeks ago, said Archer Financial Services broker Dennis Smith.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.