Chicago | Reuters—Chicago Mercantile Exchange (CME) cattle futures turned lower on Thursday amid a day of sideways and choppy trading, as wholesale beef prices dropped and cash cattle markets saw limited activity.
Lean hog futures also ended the day lower on technical trading and some profit-taking, as tensions grew between the U.S. and key export market China over last year’s spy balloon incident. CME June lean hogs LHM24 settled down 1 cent at 97.725 cents per pound.
On Thursday morning, the U.S. Department of Agriculture reported that choice beef cutout values were slightly higher – but select beef cutout values were lower. That news followed Wednesday afternoon’s report, where values for both had turned sharply lower, according to the USDA.
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This pattern of yo-yo pricing – where wholesale prices firm slightly in the morning, but by the afternoon have reversed direction – has weighed over the nearby cattle futures recently and has some investors questioning how robust consumer demand for beef will be this summer, traders said.
Meanwhile, beef packer margins continue to be negative, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
“The cattle market is just in the doldrums,” said Cassie Fish, a livestock analyst and author of The Beef blog. “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.”
Investors are also growing concerned about beef demand as the labor market cools. The weekly jobless claims report from the Labor Department on Thursday showed that the number of Americans filing new claims for unemployment benefits rose last week to the highest level in more than eight months.
Actively traded CME June live cattle futures LCM24 finished 0.525-cent lower at 175.950 cents per pound. August feeder cattle FCQ24 settled down 1.350 cents at 251.050 cents per pound.
