Cattle futures on the Chicago Mercantile Exchange (CME) experienced a downturn amidst a day marked by sideways and choppy trading. This decline coincided with a drop in wholesale beef prices and subdued activity in cash cattle markets, as reported by Reuters.
Additionally, lean hog futures also closed lower due to technical trading and some profit-taking. Tensions between the US and China, a key export market, over last year’s spy balloon incident further contributed to the downward trend. CME June lean hogs settled down 1 cent at 97.725 cents per pound.
According to the US Department of Agriculture, on Thursday morning, choice beef cutout values were slightly higher, while select beef cutout values were lower. This followed a Wednesday afternoon report where both values had sharply declined.
The fluctuating wholesale prices, characterized by a pattern of firming slightly in the morning but reversing direction by the afternoon, have impacted nearby cattle futures. Some investors are now questioning the strength of consumer demand for beef this summer.
Moreover, beef packer margins remain negative, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
Cassie Fish, a livestock analyst and author of The Beef blog, commented on the situation, stating, “The cattle market is just in the doldrums. You’re seeing open interest back to the lows for the year, and speculators just aren’t very excited trading cattle for their long positions.”
Concerns about beef demand are further fueled by cooling labor market conditions. The weekly jobless claims report from the Labor Department on Thursday revealed a rise in the number of Americans filing new claims for unemployment benefits to the highest level in more than eight months.
In the market, CME June live cattle futures closed 0.525-cent lower at 175.950 cents per pound, while August feeder cattle settled down 1.350 cents at 251.050 cents per pound.
