Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures fell on Monday, partly led by the World Trade Organization’s (WTO) ruling against the U.S. in a meat-labeling dispute, said traders.
Canada and Mexico may impose tariffs worth $1 billion onto U.S.-traded products, a WTO panel ruled on Monday, as the countries prepared to retaliate over the United States’ meat-labeling rules.
Spot December closed 2.65 cents lower at 121.625 cents/lb., and February down 2.075 cents to 127.15 (all figures US$).
Live cattle contracts were further pressured by tepid wholesale beef demand, last week’s soft cash cattle prices and futures’ recent technical-related selloff.
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Last week, market-ready (cash) cattle in the U.S. Plains sold as much as $3/cwt lower than the prior week at $124-$126.
Monday morning’s wholesale choice beef price was up 10 cents/cwt from Friday to $202.70. Select cuts fell 97 cents, to $190.52, based on U.S. Department of Agriculture data.
There are significantly fewer cattle for sale this week, but packers may have bought enough animals in advance of the Christmas and New Year’s holidays, a trader said.
Live cattle futures liquidation, and the plunge in cash feeder cattle prices by as much as $12/cwt, sank CME feeder cattle contracts. January ended down three cents/lb., to 156.45.
Uneven hog futures settlement
Fund selling and worries about a potential meat trade retaliation by Canada and Mexico pulled CME hogs lower, traders said.
Spot December and February closed 1.575 cents lower at 55.475 cents and 57.525 cents, respectively.
James Burns, president of Chicago-based JBS Trading, said the WTO’s ruling regarding country-of origin labeling (COOL) “definitely” caught the attention of traders.
“You’d have to wait and see if the U.S. government repeals COOL, which to my understanding it seems nobody wants anyway,” he added.
Although the morning’s run-up in pork belly prices lifted wholesale values, uncertainty about near-term pork demand and hog prices amid plentiful supplies deterred futures buyers.
Government data showed Monday morning’s average cash hog price in the western Midwest dipped 15 cents/cwt from Friday to $52.69.
Monday morning’s wholesale pork price of $74.04/cwt gained 31 cents from Friday, led by the nearly $4 bounce in pork belly costs, USDA said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
