Chicago | Reuters — Chicago Mercantile Exchange cattle futures retreated on Monday while lean hog futures fell for the first time in four sessions, pressured by risk-off selling as violence erupted in the Middle East over the weekend and riled global markets.
The bloodiest fighting in years between the Palestinian Islamist group Hamas and Israel sent crude oil prices soaring. The energy rally sparked renewed concerns about consumer price inflation that has dented meat demand in the past.
“The funds are long cattle and feeders, and the hog market is fragile right now. This is a risk off trade with the outside markets reacting to the war in Israel,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
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 December live cattle fell 1.325 cents to settle at 185.35 cents/lb. after hitting overhead technical resistance at its 50-day moving average. November feeder cattle shed 1.225 cents to end 249.65 cents/lb.
Poor beef packer margins and adequate supplies of market-ready animals also weighed on live cattle, although beef demand seasonally tends to rise in October into November.
The average beef packer margin on Friday was estimated at a negative $89.65 per head, down from a negative $64.50 a week earlier, according to livestock marketing advisory service HedgersEdge.com.
Worries about domestic pork demand and ample supplies of hogs hung over the lean hog market, along with news that major packer Smithfield is closing its Charlotte, North Carolina, pork processing plant and moving operations to its Tar Heel, N.C. facility.
Actively traded December lean hogs fell 1.1 cents to settle at 72.475 cents/lb. after hitting overhead technical chart resistance near its 20-day moving average during the session.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
