Chicago | Reuters — Chicago Mercantile Exchange (CME) live cattle and feeder cattle futures slumped on Tuesday as concerns about declining beef prices continued to hang over the markets.
Decreasing beef prices have spurred expectations that meat packers such as Tyson and Cargill may be less aggressive when bidding to buy cattle, said Mike Sands, president of MBS Research.
Beef supplies have increased as packers are slaughtering a bit more cattle. This week, they have slaughtered about 238,000 cattle, up from 236,000 a year ago, according to U.S. Department of Agriculture data.
Packers also have been slaughtering more hogs, adding to U.S. meat supplies.
“We’ve just got an awful lot of meat around,” Sands said.
CME August live cattle futures closed down 0.275 cent at 108.225 cents/lb. (all figures US$). CME October cattle dropped 0.525 cent to 109.25 cents/lb.
CME August feeder cattle futures slid 0.6 cent to 141.05 cents/lb. September feeders lost 0.725 cent to 141.875 cents/lb.
“There’s some pessimism relating to what the beef market has done,” Sands said. Select-grade boxed beef was $189.16/cwt on Tuesday afternoon, down five cents from Monday and $6.83 from two weeks ago, according to USDA data issued after the close of trading. Choice-grade boxed beef was $212.93/cwt, down 34 cents from Monday and $7.54 from two weeks earlier.
In the swine market, CME August lean hog futures closed down 1.05 cents at 79.05 cents/lb. October hogs jumped 1.4 cents to finish at 75.3 cents.
Expectations for China to boost meat imports helped support deferred hog futures, analysts 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.
From farms to feed mills to transport, people involved in China’s pork industry say biosecurity has been tightened, with sales of disinfectants and truck cleaning washes booming as farmers try to fend off the virus.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.