Chicago | Reuters — U.S. live and feeder cattle futures weakened with boxed beef prices on Wednesday as large supplies of heavy livestock are ready for slaughter, commodity brokers said.
Cattle heading to slaughter weigh more, analysts said, because they put on pounds as animals backed up in feedlots when meat plants closed in April because of the outbreak of the coronavirus among meatpacking workers.
In the week ended July 4, dressed cattle on average weighed 829 lbs., up from 804 lbs. a year earlier, according to the U.S. Department of Agriculture.
“You’ve got big supplies, big weights,” a broker said.
Chicago Mercantile Exchange (CME) August live cattle settled 0.85 cent lower at 99.15 cents/lb. August feeder cattle fell 0.875 cent, to 134.05 cents/lb.
Live cattle futures have retreated since nearing a two-month high on Monday, while feeder cattle have pulled back after reaching their highest price in month than a month on Monday.
Prices for choice cuts of boxed beef on Wednesday declined 77 cents, to $204.53/cwt, and select cuts slid $1.21, to $195.63/cwt, according to USDA.
Processors such as Tyson Foods and JBS USA are working their way through the cattle that backed up in feedlots, analysts said. Plants have since reopened, although many are working at reduced capacities because employees are absent and operators implemented social-distancing measures.
Meat companies slaughtered an estimated 120,000 cattle, compared with 121,000 a week ago; 118,000 a year ago; and up to 124,000 a day in March before the plant shutdowns, according to the USDA.
Pork processors slaughtered an estimated 467,000 hogs, compared with 469,000 a week ago; 482,000 a year ago; and as many as 498,000 a day in March.
CME August lean hogs ended down 0.925 cent at 47.95 cents/lb. October hogs closed 0.175 cent higher at 48.8 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.