CME update: US live cattle futures step back after previous gains
US Live cattle futures trimmed on 3 December as fears of additional pandemic closures weighed on the demand outlook.
4 December 2020
2 minute read
Reuters reports that Chicago Mercantile Exchange February live cattle futures fell 1.350 cents to 112.575 cents per pound, the contract's biggest decline in two weeks.
CME January feeder cattle ended 2 cents lower at 139.800 cents per pound, its biggest drop since 18 November.
Renewed stay-at-home orders in major metropolitan areas shook cattle markets, even as consumer demand for beef has remained strong.
"When you have cattle and uncertainty in the markets," said Joe Kooima, commodity broker with Kooima & Kaemingk Commodities Inc, "the cattle don't react very well."
Cash cattle trade in the southern Plains dipped back to $110 per cwt, after climbing to $112 on 2 December, according to the US Department of Agriculture.
Softer beef export sales also added pressure. The USDA reported net sales of US beef in the week to 26 November at 13,700 tonnes, down 16 percent from the prior four-week average, primarily to Japan, South Korea and Mexico.
Retailers stocked up on meat and other essentials as COVID-19 cases climbed this fall, hoping to avoid shortages seen when the pandemic began. But as Americans tempered panic buying, grocery stores found themselves already stocked for the holiday season - normally a time of strong beef demand, Kooima said.
"Holiday stuff is probably already in the store," he said. "They just wanted to make sure they were better prepared this time, that they had stuff on supply, as compared to scrambling last time."
Boxed beef prices fell for a second day, with choice cuts dropping $1.70 to $239.19 per cwt and select cuts dropping $3.02 to $219.93 per cwt.
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Source: Reuters
