Chicago | Reuters – U.S. cattle futures fell on Tuesday, with feeder cattle easing about 2 percent on pressure from technical selling and abundant supplies, traders and analysts said.
Lean hog futures also were mostly lower on the Chicago Mercantile Exchange, weighed down by declining prices for hogs in cash markets and lower wholesale pork values.
CME September feeder cattle notched the largest declines, settling 3.125 cents lower at 148.725 cents per pound.
Prices dropped for the second straight session, with some traders exiting long positions following steep gains last week.
Read Also
U.S. grains: Corn futures edge up, soybeans sag on improving US crop ratings
Chicago Board of Trade corn futures extended slight gains on Tuesday as short covering and bargain buying continued to support a rebound from contract lows reached during the previous session.
Declining profit margins for fattening cattle, coupled with U.S. Department of Agriculture data showing increased imports of Mexican feeder cattle into the southern United States, also weighed, according to Linn Group analyst John Ginzel.
“The feedyards are not making the money that they were, dampening the desire to fill feed pens (with cattle),” Ginzel said.
USDA data released on Friday showed that 693,068 feeder cattle from Mexico were imported to the United States so far this year, up from 691,614 cattle during the same period in 2017.
Feeder cattle fetched mostly higher prices at a weekly cash auction in Oklahoma City, USDA said Tuesday.
CME October live cattle futures shed 0.625 cent to 110.925 cents per pound, tracking the bigger losses in feeder cattle as investors awaited trades in cash cattle markets.
CME October lean hogs declined 0.250 cent to 49.975 cents per pound, with prices turning lower after earlier gains.
Pork packers have scaled back slaughter rates in recent weeks in efforts to boost profit margins that had been declining due to weaker meat prices.
“This pork market is collapsing … and you’ve seen the packers trying to pick up the margins,” Ginzel said.
Hogs in the top Iowa and southern Minnesota cash market dropped $2.76 to $50.20 per cwt, USDA said.
The agency showed wholesale pork values easing 76 cents to $72.05 per cwt, brought down largely by declines in prices for pork bellies used for bacon, which fell by $9.52 to $99.20 per cwt.
