Livestock futures at the Chicago Mercantile Exchange (CME) saw a downturn on Monday, driven by a combination of profit-taking in cattle futures and ongoing uncertainties surrounding consumer demand for beef heading into the fall season, according to market analysts.
Cattle futures experienced initial support early in the session as Chicago Board of Trade corn futures plummeted, providing relief to feeder cattle futures, traders noted. However, the recovery in corn futures later in the day reignited concerns over escalating feed costs. This comes at a time when packers are contending with persistently negative profit margins, which further pressured contracts.
According to the U.S. Department of Agriculture (USDA), wholesale beef prices showed mixed movements on Monday morning. The boxed beef cutout price for choice beef declined by 2 cents to $313.75 per hundredweight (cwt), while select cutout prices rose by $2.61 to $300.07 per cwt.
Meanwhile, hog futures faced downward pressure despite mostly higher wholesale U.S. pork prices early in the day. USDA data indicated that pork cutout prices for ham experienced a sharp decline, intensifying the negative sentiment in futures trading.
“The seasonal trends on hogs are all negative right now,” commented Don Roose, president of US Commodities. “Fall contracts are under pressure as pork supplies increase with higher hog weights and production rates compared to last year.”
USDA data further revealed that pork processors slaughtered 482,000 hogs on Monday, up from 453,000 head a week ago and surpassing the 477,242 animals processed during the same period last year.
At the closing bell, CME August live cattle futures concluded down 1.600 cents at 186.975 cents per pound. October live cattle futures, the most active contract, dropped 1.750 cents to settle at 186.800 cents per pound.
Feeder cattle futures for August finished 3.275 cents lower at 256.425 cents per pound.
In the hog market, August lean hog futures closed 2.025 cents lower at 91.450 cents per pound, marking their lowest price since July 16. October lean hog futures ended down 3.375 cents at 74.825 cents per pound.
The livestock futures market continues to navigate through fluctuating factors, including feed costs, consumer demand shifts, and production dynamics, all of which are pivotal in shaping future price movements.
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