Chicago | Reuters — Chicago Mercantile Exchange cattle futures fell on Friday as traders banked profits and squared positions ahead of the weekend as geopolitical turmoil riled energy markets and stoked concerns about beef demand.
Crude oil rallied more than five per cent on Friday on the escalating Middle East conflict as the Israeli military called for civilians to leave Gaza City ahead of an anticipated ground invasion.
Hot U.S. consumer prices data, meanwhile, reinforced expectations that interest rates may remain higher for longer to tame inflation.
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U.S. livestock: Feeder cattle extend rally to new highs
Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.
Rising costs for consumer goods often impacts demand for costlier beef cuts as buyers trade down for cheaper proteins.
“We had some position squaring and profit taking heading into the weekend,” said Matt Wiegand, commodity broker for FuturesOne.
“With the big run-up in energy prices today, even though the stock market was mixed, that kind of outside market movement tends to default into livestock selling,” he said.
Poor packer margins and lacklustre wholesale beef movement further weighed on the market, he added.
CME December live cattle futures settled down 1.05 cents at 186.75 cents/lb. (all figures US$). The contract hit overhead technical resistance at its 20-day moving average, but found support at its 50-day moving average.
November feeder cattle futures settled down two cents at 251.575 cents/lb., while January feeders finished 2.225 cents lower at 252.25 cents.
Lean hog futures were also mostly lower on the day, with the benchmark December contract down 0.6 cent at 69.5 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
