Chicago | Reuters—Chicago Mercantile Exchange cattle futures declined for a second straight session on Wednesday in a profit-taking and technical-selling correction from recent highs.
Elevated beef values have supported cattle futures for months, and traders now are assessing whether high prices could begin weighing on beef demand at the end of the summer outdoor grilling season.
Losses, however, were limited as cash cattle prices remained at a premium to futures, analysts said.
“It’s a cash-led bull market. At this time of year in October, cattle should be even on a basis with the cash,” said Don Roose, president of U.S. Commodities.
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CME October live cattle futures LCV25 ended 1.200 cents lower at 238.325 cents per pound, widening their discount to the $242 per hundredweight that packers paid for cattle at feedlot markets last week.
Packer bids at midweek this week suggested cash cattle prices could be at least steady with last week.
Beef packer margins remained in the black despite tight cattle supplies and firm cattle prices as beef values hovered near multi-year highs.
The U.S. Department of Agriculture said the choice boxed beef cutout value rebounded on Wednesday from the prior-day’s decline, rising $2.59 to $416.01 per cwt, the highest since May 2020. The select cutout gained $1.56 to $387.73 per cwt.
The average beef packer margin on Wednesday slipped to $86.20 per head, down from $99.25 a day earlier but up from $82.55 per head last week, according to livestock marketing advisory service HedgersEdge.
Feeder cattle futures followed live cattle lower, with the October contract FCV25 ending the day down 2.200 cents at 361.500 cents per pound.
CME lean hog futures dropped on Wednesday after seven straight sessions of gains that took prices to the highest in 10 weeks.
Spillover pressure from lower cattle futures and expectations for seasonally rising hog supplies into the fourth quarter weighed on the market, analysts said.
CME October lean hogs LHV25 ended 1.725 cents lower at 93.825 cents per pound.
