Chicago | Reuters – Chicago Mercantile Exchange live cattle futures eased on Wednesday, pressured by macroeconomic weight as a downgrade that stripped the U.S. of its top credit rating rippled throughout markets, analysts said.
Despite losses, supportive fundamentals remain for live cattle.
“We’re still going into smaller numbers,” said Joe Kooima, commodity broker at Kooima Kooima Varilek Trading Inc. “Weights are gonna be light after this heat episode last week. I would say fundamentally, we’re still fine. It’s just that today, there was more of an influence from the outside world.”
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
CME August live cattle futures LCQ3 eased 1.475 cents to 178.025 cents per pound. Most-active October live cattle LCV3 fell 1.325 cents to settle at 180.500 cents per pound.
Packers slaughtered an estimated 123,000 head of cattle on Wednesday, down from 125,000 a year prior, the U.S. Department of Agriculture reported.
Boxed beef prices slipped, with choice cuts falling $2.92 to $303.18 per cwt., while select cuts lost $2.13 to $277.47 per cwt., the USDA said.
Beef packer margins also slid, falling to $27.20 a head, versus $64.35 a day earlier, according to HedgersEdge.com.
September feeder cattle FCU3 futures eased 1.800 cents to 250.100 cents per pound.
CME lean hog futures were also pressured by macroeconomic forces, but remain supported by strong cash trade.
Nearby August lean hog futures LHQ3 fell 1.000 cent to 102.675 cents per pound, while the most-active October contract LHV3 slipped 0.775 cent to 84.875 cents per pound.
Pork packer margins also declined, falling to $10.42 per head, from $19.75 a day prior, HedgersEdge.com said.
An estimated 448,000 hogs were slaughtered, up from 465,000 hogs a year prior, according to the USDA.
The CME’s Lean Hog Index, a two-day weighted average of cash prices, eased to 105.90 per cwt.
–Reporting for Reuters by Christopher Walljasper.
