Chicago | Reuters — Chicago Mercantile Exchange live cattle futures fell one per cent on Thursday, pressured by technical selling and as investors took profits following Wednesday’s nearly four-week high, traders and analysts said.
Feeder cattle futures also were mostly lower while lean hog futures were mixed, with the front-month contract hitting the lowest levels since November.
Cattle gained earlier this week on optimism for higher trades in U.S. Plains cash cattle markets and on news that China was lifting a 13-year ban on some imports of U.S. beef. The higher prices pushed live cattle futures into technically oversold territory and front-month October cattle also hit upside resistance at moving averages including the 50-day.
China’s agriculture ministry said on its website it conditionally lifted a ban on U.S. beef that was under 30 months old, confirming a statement by Chinese Premier Li Keqiang late on Tuesday in New York. Imports of most U.S. and Canadian beef were banned in China since a 2003 case of bovine spongiform encephalopathy (BSE).
“We’re getting a little bit closer to officially lifting the ban and it looks promising, but that’s yesterday’s news,” U.S. Commodities analyst Don Roose said. “The market was a little overbought technically, and we’re taking a little step back.”
CME October live cattle settled 1.475 cents lower at 107.075 cents/lb., notching its largest daily decline in about two weeks. CME October feeder cattle were up 0.075 cent at 132.3 cents/lb. while most deferred feeder contracts lost ground.
Front-month CME October lean hogs slumped to a lifetime low of 53.7 cents/lb., before finishing down 0.225 cent at 54.2.
Investors in both cattle and hogs were adjusting positions ahead of U.S. Department of Agriculture reports, with a monthly Cattle on Feed report due after the close of trading on Friday and a quarterly Hogs and Pigs forecast due on Sept. 30.
“Supplies remain large but we might have a little evening-up ahead of the all-important quarterly Hogs and Pigs report next week,” Roose said.
Abundant supplies of beef, pork and poultry have weighed on animal and meat prices for much of this year. USDA after the close of futures trading showed wholesale beef prices at the lowest levels since 2013 while pork prices were the lowest since early September.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.