Chicago | Reuters — Chicago Mercantile Exchange live cattle futures slumped for the fourth time in five sessions on Friday as falling cash cattle prices and ample supplies of slaughter-ready animals weighed on the market, traders said.
The possibility that meat exports could slow due to trade tensions with China and uncertainty about a deal to revamp the North American Free Trade Agreement (NAFTA) fueled concern about an oversupply of meat in the U.S. market.
Meanwhile, cattle traders have been anticipating an oversupply of cattle this spring that would take prices down from recent highs.
“Traders are looking ahead at that big supply coming down the pike,” said independent livestock futures trader Dan Norcini.
“With all these trade issues, there’s a lot of second-guessing going on now whether demand is going to be sufficient to eat through all this supply that’s coming,” he said.
CME June live cattle ended down 0.65 cent at 102.4 cents/lb. (all figures US$). Actively traded CME August live cattle futures shed 0.875 cent to settle at 98.225 cents/lb. after touching its lowest since April 4.
Cash cattle at U.S. Plains feedlot markets traded this week from $112 to $118/cwt this week, well below last week’s sales of mostly $122/cwt, traders said.
Feeder cattle futures fell in tandem with the live cattle market. Sharply higher corn futures added pressure as rising feed costs chew into margins for feeders.
The actively traded August contract ended 1.1 cents lower at 137.625 cents/lb.
Lean hog futures declined, pressured by concerns about trade and higher feed costs.
CME June hogs fell 1.775 cents to 74.7 cents/lb. while July hogs ended 0.95 cent lower at 77.25 cents.
The U.S. Department of Agriculture is due to release its monthly cold storage report on Tuesday at 2 p.m. CT which will include total beef and pork inventories for April. A survey of analysts, on average, projected last month’s total beef stocks at 642.6 million lbs. and 465.9 million for pork.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.