CHICAGO, Nov 20 (Reuters) – U.S. cattle futures fell additional on the Chicago Mercantile Trade on Thursday below stress from fund promoting and decrease money costs, merchants mentioned.
Futures have dropped over the previous month after U.S. President Donald Trump mentioned he was working to decrease beef costs for shoppers, triggering steep selloffs in cattle that drove some merchants out of the markets.
Beef costs set data this yr after a years-long drought dried up pasture lands and compelled ranchers to slash the nation’s cattle herd to its smallest dimension in a long time. Demand for steaks and hamburgers has remained sturdy.
“The basics are usually not weak for cattle, however the fund promoting is relentless,” mentioned Brian Hoops, president of Midwest Market Options. “They’re nonetheless seemingly web lengthy and are utilizing any small rallies as promoting alternatives to get out of lengthy positions.”
CME February dwell cattle futures closed down 1.85 cents at 215.400 cents per pound. January feeder cattle futures slumped 5.075 cents to finish at 316.375 cents per pound.
Within the money market, dressed cattle traded at $345 per hundredweight in northern areas on Wednesday, down $5-$6 from per week in the past, brokers mentioned. Within the south, dwell cattle traded at $224 per hundredweight, down $3-$4 from final week, they mentioned.
Merchants have been ready for the U.S. Division of Agriculture to problem a Cattle on Feed report on Friday, after the company didn’t launch the month-to-month report in October as a result of federal authorities’s shutdown. Analysts estimated the stock of cattle on feed in U.S. feedlots on November 1 was down 2.2% from a yr earlier.
“Tomorrow’s COF report must be bullish for the business, however till the technicals enhance, fundamentals do not imply loads,” Hoops mentioned.
“Packers are additionally growing kills, which ought to imply they want extra cattle and would pay extra for the money stock, however with the futures in a free fall, that is not taking place both.”
Meatpackers slaughtered an estimated 120,000 cattle and 494,000 hogs on Thursday, regular from per week in the past, based on the USDA.
CME February lean hog futures completed up 0.625 cent at 79.650 cents per pound. (Reporting by Tom Polansek; Modifying by Arun Koyyur)
