Cattle fall most in 1-1/2 weeks as beef prices tumble
U.S. live cattle futures fell the most in 1-1/2 weeks on Wednesday in a selloff linked to lackluster demand from meat packers and government data that showed the lowest wholesale beef prices in four years, traders said.
Feeder cattle futures dropped the most so far this month while lean hogs declined to a 14-year low before rebounding slightly, as abundant U.S. meat supplies continued weigh on livestock futures at the Chicago Mercantile Exchange.
Live cattle futures extended losses in relatively heavy trading volumes at midday, when the U.S. Department of Agriculture showed sharply lower beef prices. Choice-grade wholesale beef at the end of the trading day was down $2.86 at $178.44 per cwt, lowest since 2012.
CME December live cattle futures settled 2.100 cents lower at 97.125 cents per lb and was holding above the six-year lows reached last week.
"There's just not a lot of positive news out there," said Doug Houghton, analyst at brokerage Brock Associates.
Packers earlier were not aggressively bidding to buy slaughter-weight cattle that feedlots were offering at $100 to $102 per cwt, following cash cattle trades last week of $97 to $98.
Traders also were beginning to square their positions in advance of USDA's monthly Cattle on Feed report on Friday afternoon.
Analysts polled by Reuters expected USDA to show cattle placed on feed in September up 3.6 percent from the same month last year.
CME November feeder cattle futures eased 3.200 cents to 114.825 cents per lb, further pressured by a spike in corn futures that could raise animal feed costs for ranchers fattening cattle for slaughter.
CME December lean hogs settled 0.050 cent higher at 41.175 cents per lb.
The contract earlier fell to a lifetime low of 40.700 cents per lb, the lowest level on a continuous chart since 2002.
U.S. hog production is expected to be record-high this year, and supplies could outpace pork packers' capacity to slaughter the animals.
Top global pork producer Smithfield Foods, a division of China's WH Group, late on Wednesday said operations were back to normal at facilities in North Carolina after hog slaughter was disrupted by Hurricane Matthew.