Cattle Futures Retreat on Policy and Trade Pressures

Key Moments

Cattle Futures Slide on Policy and Trade Developments

Chicago Mercantile Exchange (CME) live and feeder cattle contracts moved lower on Tuesday as traders responded to the lifting of livestock movement restrictions in parts of Texas and New Mexico, according to Reuters.

Market participants continued to weigh several recent negative factors for cattle, including a temporary U.S. waiver on beef import tariffs, persistently weak boxed beef prices, and the reopening of the U.S.-Mexico border to imports of feeder cattle.

“In general, cattle doesn’t have much going for it,” said Austin Schroeder, analyst at Brugler Marketing. “There’s not a lot of reason to buy this thing from the fund’s perspective.”

Futures Performance at the CME

At the close on Tuesday, CME October live cattle futures settled 0.60 cent lower at 212.075 cents per pound. October feeder cattle futures on the CME declined 1.625 cents to 315.40 cents per pound.

Beef Trade Discussions and Tariff Actions

Brazilian billionaire Joesley Batista, a co-owner of meatpacker JBS, met with U.S. President Donald Trump on August 20 to discuss how greater beef shipments from Brazil could help cool U.S. beef prices if a 26% import tax were removed, the Wall Street Journal reported on Monday, citing people familiar with the matter.

The following day, Trump stated that he will temporarily relax beef tariffs in an effort to bring prices down and indicated that ground beef imports would be offered at 25% below existing prices, a decision that drew strong criticism from the U.S. cattle sector. Reuters reported that it could not immediately verify the account.

USDA Measures and Protein Market Prices

U.S. Agriculture Secretary Brooke Rollins said on Monday that the USDA is implementing measures to bolster the beef sector, including providing loans to small meat processors and allowing the use of conserved land for grazing.

On Tuesday, the U.S. Department of Agriculture quoted choice boxed beef at $378.02 per hundredweight, an increase of $2.20 from the prior day. Select boxed beef rose $2.17 to $360.66 per hundredweight.

In the pork complex, the USDA reported wholesale pork carcass values at $97.68 per hundredweight, up 1 cent from a day earlier. The most actively traded October lean hog contract at the CME ended 0.025 cent lower at 83.65 cents per pound, reflecting only a marginal move as carcass values held steady.