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CME update: live cattle futures sink on lower cash prices and decreasing beef values

09 December 2020

US live cattle futures fell for a fourth straight session on 8 December as cash cattle traded lower at the southern US Plains feedlot markets.

Reuters reports that the slide in cattle futures comes as wholesale beef prices continue to drop in line with seasonal demand.

Declines, however, were limited by bargain buying as some traders viewed the recent drop in cattle prices as overdone.

Actively traded Chicago Mercantile Exchange February live cattle futures touched a 2-1/2 week low, and ended down 0.250 cent at 110.775 cents per pound. CME January feeder cattle futures ended down 0.225 cent at 137.575 cents per pound, while deferred contracts edged higher.

 

Cattle markets have stumbled as rising US coronavirus infections have fuelled some concerns about supply chain disruptions similar to those seen early in the pandemic.

Wholesale values have also eroded with expanding closures of restaurants and other food service outlets, although prices remain slightly above year ago levels.

"Wholesale beef is still breaking. End users are now procuring cattle for that post-holiday period and that lower demand is a little concerning," said Rich Nelson, chief strategist at Allendale Inc.

Feedlot cattle in Texas traded on Tuesday at $108 per cwt, down $2 from a week ago.

The choice boxed beef cut-out dropped $5.78 to $225.02 per cwt on Tuesday, while select cuts fell $4.06 to $205.42 per cwt, according to US Department of Agriculture (USDA) data.

Read more about this story here

Source: Reuters



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