18 August 2023

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) live cattle futures ended lower on Thursday, with the most-active contract hitting its lowest price since July, as the market continued to retreat from recent highs, reported Reuters.

Futures and cash prices have jumped this year after drought reduced the amount of pastures available for grazing and prompted US cattle producers to reduce their herds.

The increase in cash prices has left meat packers losing money on each head of cattle they slaughter, raising fears among traders that processors' demand for the animals could decline, said Don Roose, president of brokerage US Commodities.

"We're in our tightest numbers right now," Roose said about the herd.

Most-active October live cattle slipped 0.950 cent to finish at 178.325 cents per pound at the CME and hit its lowest price since July 31. The market has pulled back since hitting a contract high of 185.75 cents per pound on July 20.

CME September feeder cattle ended down 1.875 cents at 247.125 cents per pound.

Meat packers lost an estimated $23.20 per head of cattle on Thursday, compared with losses of $63.20 per head a week ago, according to HedgersEdge.com.

The US Department of Agriculture (USDA) said values for choice cuts of boxed beef jumped by $5.15 from Wednesday to $314.14 per hundredweight. Select cuts of boxed beef rose by $1.49 to $286.26 per hundredweight.

The USDA on Friday is expected to report that there were about 1.6% fewer cattle on feed for the slaughter market as of Aug. 1 than a year earlier, analysts said.

In demand news, the USDA said net export sales of US beef in the week ended Aug. 10 were 15,100 metric tons for 2023. That was down 13% from the prior four-week average.

For pork, weekly US export sales of 28,700 metric tons for 2023 were up 36% from the prior four-week average.

Most-active CME October lean hog futures rose 0.975 cent to 79.150 cents per pound, a day after touching their lowest price since June 30.