Key Moments
- CME August live cattle futures declined 1.150 cents to 242.425 cents per pound, marking a third consecutive session of losses.
- August feeder cattle futures fell 2.875 cents to 364.600 cents per pound, reaching a two-week low.
- Actively traded August lean hog futures settled 0.925 cent higher at 98.200 cents per pound, as nearby hog contracts ended mixed.
Holiday, Weather, and Technical Factors Weigh on Cattle
Chicago Mercantile Exchange (CME) cattle futures declined for a third straight session on Tuesday, pressured by technical selling and profit-taking ahead of the US Independence Day holiday weekend, according to Reuters. Market participants also faced growing anxiety that hot weather could dampen consumer appetite for beef.
Expectations of beef plant closures around the upcoming holiday have led to abbreviated slaughter schedules, further restraining demand for cattle. These operational cutbacks added to the downward pressure on futures.
“It’s a lot of technical selling and profit-taking going into the weekend. Seasonally, we’re going into a period that’s usually weaker for beef demand. This hot weather this week probably doesn’t get anybody excited about beef demand either,” said Doug Houghton, analyst with Brock Capital Management.
Packer Margins Deep in the Red
Beef packer profitability remains under strain, with margins still firmly negative. Recent closures of several beef plants have heightened worries about the level of cattle demand from processors.
In response to industry challenges, the US Department of Agriculture on Wednesday announced a $500 million program intended to support small- and mid-sized beef processors.
Livestock marketing advisory service HedgersEdge estimated beef packer losses at $292.00 per head on Tuesday, a figure described as little changed from a month earlier. LIV/H
CME Cattle Futures: Recent Price Action
CME August live cattle futures ended the session 1.150 cents lower at 242.425 cents per pound. The contract breached technical chart support at its 20- and 50-day moving averages, triggering additional selling and driving prices to their lowest level in two weeks.
August feeder cattle futures also weakened, closing down 2.875 cents at 364.600 cents per pound, likewise hitting a two-week low.
| Contract | Exchange | Settlement Price (cents/lb) | Change (cents) | Notable Detail |
|---|---|---|---|---|
| August live cattle | CME | 242.425 | -1.150 | Broke 20- and 50-day moving average support; 2-week low |
| August feeder cattle | CME | 364.600 | -2.875 | Two-week low |
| August lean hogs | CME | 98.200 | +0.925 | Nearby hog contracts ended mixed on short covering |
Lean Hog Futures Finish Mixed
CME lean hog futures closed with a mixed performance on Tuesday. Nearby contracts moved higher, supported by short covering, but upside momentum was constrained by the premium of futures prices over the cash market.
The actively traded August lean hog contract settled 0.925 cent higher at 98.200 cents per pound.
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