Chicago | Reuters — Chicago Mercantile Exchange live cattle futures slid to three-month lows on Tuesday, as beef demand slows, leaving cattle producers with ample supply as packer demand softens, traders said.
“Packers are bought for a long ways out — have a lot of inventory,” said Scott Varilek, broker at Kooima Kooima Varilek Trading Inc.
CME October live cattle settled down 1.05 cents at 123.75 cents/lb. after hitting 123.675 cents, its lowest price since June 9 (all figures US$).
October feeder cattle lost 2.425 cents, to 160.05 cents/lb., reaching their lowest since July 21 at 159.15 cents.
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October live cattle is nearing the contract’s 200-day moving average, having fallen below its 100-day moving average on Friday.
Beef prices eased, with choice cuts of boxed beef down $1.23, to $335.19 per hundredweight (cwt), while select cuts dropped by $2.23, to $301.90/cwt, the U.S. Department of Agriculture said.
Margins for beef packers were about $904.75 per head of cattle, down from $923.10 on Friday and $945.95 a week earlier, according to livestock marketing advisory service HedgersEdge.com.
Markets briefly reacted positively to news that Chinese beef importers had suspended exports by top supplier Brazil due to two cases of BSE, though gains were erased after the country said it would still make purchases in anticipation of a quick resumption of trade.
CME lean hog futures ended lower, with the most-active October contract settling down 1.475 cent at 88.1 cents/lb.
The CME lean hog index, a two-day weighted average of cash prices, fell to $100.06/cwt, its lowest since April 2.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
