Chicago | Reuters — Chicago Mercantile Exchange (CME) live cattle futures ended mostly lower on Monday as weak boxed beef prices fueled concerns about increasing supplies.
Select-grade boxed beef was $189.21/cwt on Monday afternoon, down 2.7 per cent from a week ago, according to U.S. Department of Agriculture data issued after the close of trading (all figures US$). Choice-grade boxed beef was $213.27, down 1.9 per cent from a week earlier.
The declines signal a buildup of beef supplies before the U.S. Department of Agriculture, in a monthly report on Friday, is expected to report large numbers of cattle in U.S. feedlots, traders said. As of June 1, there were 11.7 million head, the highest figure for that date since USDA began tracking the data in 1996.
Declining boxed-beef prices also raised concerns about potential weakness in demand, said Rich Nelson, chief strategist for Illinois-based broker Allendale.
“We have concern about this wholesale beef,” he said.
CME August live cattle futures settled up 0.025 cent at 108.5 cents/lb. after reaching 108.975, the contract’s highest level since May 28. CME October cattle dropped 0.2 cent to 109.775 cents/lb.
Other deferred contracts also declined, although some traders said they were impressed the market pared losses before the close of trading.
CME August feeder cattle futures edged up 0.05 cent to 141.65 cents/lb.
In the swine market, CME August lean hog futures settled down 0.55 cent at 80.1 cents/lb. October hogs rose 0.675 cent to finish at 73.9 cents.
Expectations for China to boost meat imports supported deferred hog futures, traders said. China, the world’s top hog producer and pork consumer, is struggling to contain an outbreak of the fatal hog disease African swine fever, which has killed more than a million pigs.
China’s agriculture ministry said on Monday it will carry out checks on local veterinary authorities in 10 provinces as it tries to slow the ongoing spread of the disease.
China produced 24.7 million tonnes of pork in the first six months of 2019, down 5.5 per cent from a year earlier, according to figures from the National Bureau of Statistics, as African swine fever spread.
— Reporting for Reuters by Tom Polansek in Chicago.