Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed lower on Monday, following last Friday’s cash prices that fell short of expectations and worries over potential consumer response to news about a possible tie to red meat and cancer risk, traders said.
The World Health Organization (WHO) warned that eating processed meats can lead to bowel cancer in humans, and red meat is a likely cause of the disease.
Spot October closed 1.475 cents/lb. lower at 139.55, and December down 1.4 cents, to 142 (all figures US$).
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Some investors were skittish about the WHO’s announcement.
Cassandra Fish, author of industry blog The Beef, said she does not believe the organization’s decision will impact U.S. beef consumption, based on numerous recommendations in past years that have been “walked back” or reversed.
“Consumers are weary and wary of this type of rhetoric at this point and most fall into the ‘consume in moderation’ mode supported by common sense,” she added.
Meanwhile, packers late last Friday paid $134.50 to $138 per cwt for market-ready, or cash, cattle, compared to $134 to $137 in the previous week.
Processors have resisted spending more for high-priced cattle that has whittled down their profits in recent weeks, along with the slowdown in wholesale beef demand.
Monday morning’s wholesale choice beef price was up one penny to $217.18/cwt from Friday. Select cuts slipped 22 cents, to $210.68, the U.S. Department of Agriculture said.
The average beef packer margin for Monday was $4.40 per head, down from $14.80 on Friday and $75.50 a week ago, as calculated by HedgersEdge.com.
Live cattle market selling pressured CME feeder cattle futures, with October ending 1.375 cents/lb. lower at 193.675 cents.
Hog futures pare early gains
CME lean hogs ended lower after WHO’s statement and soft cash prices amid ample supplies, which turned back early-session advances, trader said.
December closed 0.75 cent/lb. lower at 62.85 cents, and February down 0.35 cent, to 65.8.
Cash hog prices in the Midwest on Monday morning were down as much as $2 from Friday, regional hog dealers said.
The morning’s wholesale pork price rose $1.05 from Friday to $87.03/cwt, following two days of declines, based on USDA data.
Pork prices for all cuts may have dropped enough to generate last-minute retail buying for October Pork Month, a trader said. But ham, turkey and beef will be the “main draw” in weeks ahead, he said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
