Chicago | Reuters — Chicago Mercantile Exchange live cattle futures fell on Tuesday, following broad declines in commodities and Wall Street equities tied to fears of a global economic recession, traders said.
“It’s the economy. You’ve got the fears of going into a recession,” said Don Roose, president of Iowa-based U.S. Commodities. “So goes the equity market, so goes cattle,” Roose said, noting that economic slumps tend to reduce consumer demand for high-priced cuts of beef.
CME’s benchmark August live cattle contract settled down 1.675 cents at 132.925 cents/lb., retreating back below its 50-day moving average near 134.5 cents (all figures US$).
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August feeder cattle fell 1.8 cents to settle at 172.7 cents/lb., shrugging off support from a plunge in corn futures that should signal cheaper feed costs.
Cash cattle markets were quiet on Tuesday. Market-ready cattle traded last week at $137-$138/cwt in southern U.S. Plains feedlot markets and as high as $151/cwt further north in Nebraska, according to the U.S. Department of Agriculture (USDA).
CME lean hog futures closed mostly higher on Tuesday, bucking the lower trend in cattle, grains and other commodities.
August hogs settled up 2.975 cents at 105.950 cents/lb.
USDA quoted the pork carcass cutout value at $114.48/cwt on Tuesday afternoon, up $5.73 from Friday.
In Europe, African swine fever has spread to Lower Saxony, Germany’s most important pig-rearing region, dealing a blow to the sector with major markets such as China likely to maintain import bans for years to come, analysts said on Monday.
Meanwhile, China’s state planner urged top hog breeders to ensure steady supply, it said in a statement late on Monday, after prices surged in recent months.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
