CME update: live cattle futures close lower on profit-taking
US live cattle futures ended lower on 11 May, with some contract months sinking their daily 3-cent limit on profit-taking.
12 May 2020
2 minute read
Reuters reports that the slight fall comes amid signs that the US meat packing sector was stepping up beef production after COVID-19-related bottlenecks last month.
Chicago Mercantile Exchange (CME) June live cattle futures settled down 1.975 cents at 92.675 cents per pound, after surging to a six-week high on Friday.
The August and October live cattle contracts fell the daily 3-cent limit, and limits will widen to 0.045 cents for Tuesday's session, the exchange said.
August feeder cattle futures fell 4.275 cents to 132.675 cents per pound.
"The plants are coming back online, so beef supplies are going to start to increase. Therefore beef prices are going to start to decrease, so it's time to take your money and run," said Alan Brugler, president of Nebraska-based Brugler Marketing & Management.
On Friday 8 May, the USDA said that 14 meat plants that had closed due to coronavirus-related labour shortages were in the process of reopening.
The Agriculture Department's estimated Monday's cattle slaughter at 86,000 head, matching Thursday's tally as the largest kill since 20 April.
The increased slaughter pace should ease a backlog of animals, although it could also help lift cash cattle prices, Brugler noted.
Wholesale beef prices remained historically high, however. The choice boxed beef cutout rose to $467.81 per cwt, up $6.93 from Friday and up nearly $58 from a week ago, according to USDA.
Retailers like Kroger and Costco have limited sales of some meat items, and margins for beef processors have climbed.
Traders await Tuesday's monthly USDA supply/demand reports in which the government might revise its estimates for quarterly US beef and pork production.
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