U.S. live cattle futures fell sharply March 2 in a profit-taking setback ahead of the weekend, after posting an all-time high late this week, amid worries that demand for high-priced beef may soon begin to wane, traders said.
The plunge came as cash cattle in the southern U.S. Plains traded at a record-high $130 per hundredweight, up $1 from the highest sales the previous week and a price that many traders had expected this week.
“It’s a classic buy the rumor sell the fact trade,” said Joseph Ocrant, president of Oak Investment Group.
Ideas that wholesale beef prices may be nearing a peak also weighed on futures.
“We’ve been hearing this drumbeat about retailers shifting away from beef and into pork or chicken so it looks like this gas cost issue is finally bleeding into actual (beef) demand,” said Rich Nelson, analyst with Allendale Inc.