Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Wednesday dropped to their lowest prices since July amid uncertainty about how much U.S. demand will decline as the summer grilling season draws to a close.
Beef and cattle prices are often weak this time of year as demand weakens. This year, closures of restaurants, school cafeterias and event spaces such as hotel ballrooms due to the COVID-19 pandemic are making demand more uncertain, analysts said.
Some traders are starting to step away from the market ahead of the Labour Day holiday on Monday, considered the traditional end of summer, brokers said. Their absence can make the market more volatile.
“The real concern is what’s going to happen to demand after Labour Day?” a market analyst said. “With so many restaurants and food services still under restrictions, will we maintain demand?”
Prices for choice cuts of boxed beef fell by $1.11, to $227.23/cwt, according to U.S. Department of Agriculture data (all figures US$). Prices for select cuts rose slightly.
Chicago Mercantile Exchange October live cattle futures ended down one cent at 104.475 cents per pound and hit their lowest price since July 15.
October feeder cattle slipped 1.2 cents to 139.45 cents/lb.
CME October lean hogs jumped 1.375 cents to 56.4 cents/lb.
Traders on Thursday will review weekly U.S. export sales data to assess pork demand from China, the world’s top pork consumer. A deadly pig disease has devastated China’s hog herd over the past two years, raising the need for imports.
Soaring prices for corn — critical for China’s mammoth hog, dairy and poultry sectors — are stoking food security jitters in China.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.