Chicago | Reuters—Chicago Mercantile Exchange cattle futures tanked on Tuesday on fund selling and as markets remained under pressure from bigger-than-expected U.S. feedlot placements, brokers said.
Live cattle and feeder cattle futures set two-month lows as benchmark contracts declined for their sixth consecutive session. June live cattle futures LCM24 have declined about 1.6 per cent this month and May feeder cattle FCK24 have dropped 3.5 per cent in March.
“Technical action was set up for a pullback,” said Alan Brugler, president of Brugler Marketing & Management. “The feeders led the charge.”
Read Also
USDA adjusts supply/demand estimates
Corn and soybean yields in the United States were left unchanged in the latest supply/demand estimates from the U.S. Department of Agriculture, released July 11, although a reduction in harvested area led to small downward revisions to production for the crops.
CME May feeder cattle FCK24 ended down 5.375 cents at 247.250 cents per pound, while June live cattle LCM24 dropped 3.225 cents to finish at 178.375 cents. Both contracts touched their lowest prices since Jan. 25.
Traders continued to digest a U.S. Department of Agriculture report, issued after trading ended on Friday, that showed cattle placements into feedlots in February jumped 9.7 per cent from a year ago, topping estimates.
The data signals that producers are still sending cattle to slaughter instead of keeping them to reproduce to rebuild the U.S. herd, Brugler said. Ranchers slashed the herd to its smallest level in decades due to a drought that reduced pasture land available for grazing.
“We’re still in the liquidation phase,” Brugler said.
Traders also were assessing USDA confirmation on Monday of avian flu in Texas and Kansas dairy cattle herds.
A separate, quarterly USDA hog report due on Thursday is expected to show the U.S. pig herd on March 1 was about the same size as it was a year earlier at around 74.136 million head, analysts said.
In China, the world’s biggest pork producer and consumer, there were 40.42 million sows at the end of February, down 6.9 per cent from the previous year, the Chinese government said.
Benchmark CME June lean hog futures LHM24 closed 0.325 cent weaker at 101.350 cents per pound.
