Chicago | Reuters — U.S. cattle and hog futures ended mostly lower on Tuesday under pressure from large supplies, analysts said.
Live cattle futures retreated a day after nearing a two-month high, while feeder cattle pulled back after reaching their highest price in month than a month on Monday.
“We’ve gotten a bit overbought on the cattle,” said Matt Wiegand, commodity broker for FuturesOne.
Chicago Mercantile Exchange August live cattle settled 0.1 cents lower at 100 cents/lb. (all figures US$). August feeder cattle fell 1.225 cents to 134.925 cents/lb.
CME August lean hogs ended down 0.4 cent at 48.875 cents/lb. October hogs closed 0.425 cent lower at 48.625 cents/lb.
The United States has plenty of cattle after farmers and ranchers expanded herds. There were 11.7 million head in feedlots on June 1, the second highest inventory for that date since records began in 1996, according to the U.S. Department of Agriculture.
Processors such as Tyson Foods and Brazilian-owned JBS USA are working through supplies that backed up in feedlots when meat plants temporarily closed in April due to the coronavirus pandemic. Slaughterhouses have since reopened, although many are working at reduced capacities because workers are absent and operators implemented social distancing measures.
There were more than 17,000 COVID-19 cases and nearly 100 deaths among U.S. meatpacking workers in April and May, according to a Centers for Disease Control and Prevention report released on Tuesday.
Meat companies slaughtered an estimated 119,000 cattle on Tuesday, compared to up to 124,000 in March before the shutdowns, according to the USDA. They slaughtered an estimated 469,000 hogs, compared to as many as 498,000 a day in March.
Margins rose to $308.45 per head of cattle from $305.70 a week ago for beef processors, according to livestock marketing advisory service HedgersEdge.com. Margins fell to $60.25 per hog from $61.70 a week ago for pork packers.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.