Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended lower on Tuesday, after the U.S. Department of Agriculture slightly increased its forecasts for beef production this year and next year.
USDA, in a monthly report, raised its 2021 estimate by 0.3 per cent from September because of higher cow slaughtering and heavier average carcass weights. The projection for 2022 production rose by 0.4 per cent.
USDA also lowered its forecast for 2021 fed cattle prices due to large supplies. The 2022 price forecast increased, after ranchers have reduced their herd sizes in recent years.
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“It’ll be next year when the market really starts feeling the pain as far as tightening supplies,” said Rich Nelson, chief strategist for commodity broker Allendale.
Most-active December live cattle futures settled down 0.925 cent at 129.25 cents/lb. (all figures US$). February live cattle slipped 0.625 cent, to 134.25 cents/lb.
Choice cuts of boxed beef fell by five cents, to $281.07/cwt, while select cuts dropped by $2.29, to $261.35/cwt, according to daily USDA data.
In CME’s feeder cattle market, futures finished higher as grain futures declined. USDA’s monthly report raised the government’s estimates for the harvests of corn and soybeans used for animal feed.
Most-active November feeder cattle contract crept 0.075 cent higher to 161.8 cents/lb., while the January contract advanced 0.675 cent to 162.775 cents. Both contracts reached their highest prices since Sept. 8.
CME’s most-active December lean hogs contract, meanwhile, fell to its lowest price since Sept. 24. The contract ended down two cents at 78.175 cents.
USDA raised its U.S. pork import forecasts for this year and next year because of increased supplies on the global market. The U.S. pork export forecast was cut for 2021 because of weaker demand from China, the world’s top pork consumer, but raised for 2022.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
