Chicago | Reuters — Chicago Mercantile Exchange cattle and hog futures fell on Friday, pressured by fears that Mexico, a key importer of both U.S. beef and pork, will retaliate against President Donald Trump’s plans to roll out tariffs on imports from Mexico next week.
The trade worries come as U.S. supplies of both hogs and cattle are outstripping demand.
Total U.S. beef export sales in May were down 23 per cent from the four week average, and shipments were three per cent lower than the same period a year earlier, according to U.S. Department of Agriculture (USDA) data.
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U.S. livestock: Cattle futures slip on demand concerns as beef prices turn lower
Chicago Mercantile Exchange cattle futures dipped on Tuesday as gains fueled by tight cattle supplies and strong demand faded amid concerns that high beef prices and cooling weather could soon affect retail meat sales, analysts said.
Japan — which has been the top U.S. beef export market this year — saw a 40 per cent drop in export sales for the four week period compared to a year earlier. But traders say those numbers should turn around later this year due to competition for Australian beef stocks.
Meanwhile, livestock futures continue to wrestle with a less-than-great start to the U.S. grilling season last month, when wet weather across much of the U.S. led to sluggish consumer demand for higher-end pork and beef cuts, traders said.
As the live cattle futures market is running at a significant discount to the cash market, feedlots are shedding their excess supplies, traders said.
Slaughter numbers remain high, according to federal data, while steer weights are slipping to their lowest in nearly two years, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
“They’re just looking to move the cattle, in case the prices fall,” Roose said.
August feeder cattle finished Friday down 2.025 cents at 137.25 cents/lb. and September feeders settled down 2.25 cents at 137.35 cents.
June live cattle settled down 0.675 cents at 106.925 cents/lb., and most actively traded August closed down 1.5 cents at 103.3 cents.
CME June lean hogs closed down 0.725 cents at 78.65 cents/lb., while most actively traded July hogs ended down three cents at 83.35 cents.
— Reporting for Reuters by P.J. Huffstutter in Chicago.
