11 November 2024

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) live cattle futures tumbled to a six-week low on Friday under pressure from declining prices for boxed beef and livestock in the cash market, Reuters reported, citing traders.

Concerns about demand for US beef weighed on prices as output is benefiting from ranchers who are compensating for dwindling herd numbers by raising cattle to heavier weights.

Ranchers have also been sending more cattle to slaughter in recent years as drought has reduced the amount of pasture available for grazing.

Slaughtered cattle are tipping the scales at 870 pounds each, up 35 pounds from a year ago, according to US Department of Agriculture (USDA) data issued on Thursday.

"If we were to have a hiccup in beef demand, either domestic or international, it could be ugly as we have plenty of beef available due to weights and numbers on feed," said Ross Baldwin, hedge strategist for AgMarket.Net.

CME December live cattle fell 2.125 cents to close at 183.700 cents per pound and hit its lowest since Sept. 26. January feeder cattle futures slid 2.9 cents to 241.425 cents per pound and touched the lowest since Nov. 1.

In the cash market this week, cattle traded $3 to $5 per cwt lower than last week, Baldwin said. "It's been kind of crazy how quick it came about."

Prices for choice cuts of beef shipped to wholesale buyers in large boxes fell by $1.53 per cwt on Friday, while select cuts eased by 53 cents, according to USDA. The declines followed sharper drops on Thursday, when boxed beef prices sank by $6.13 for choice cuts and $3.48 for select cuts.

"Boxed beef fell apart this week. Cash cattle traded lower. It was kind of a cascade of events going down," said Don Roose, president of brokerage US Commodities.

In the pork market, CME December hog futures finished down 0.775 cent at 80.425 cents per pound and set its lowest price since Oct. 28.