Key Moments
- Estimated daily cattle slaughter fell to 90,000 head from 107,000 head a week earlier, according to the US Department of Agriculture.
- CME December live cattle settled at 222.100 cents per pound, while October feeder cattle closed at 331.750 cents per pound.
- The total US hog inventory as of September 1 was 74.3 million head, a 1.5% year-on-year decline that exceeded analysts’ expectations for a 0.8% drop.
Cattle Futures Slide on Reduced Processing Volumes
Chicago Mercantile Exchange (CME) live cattle and feeder cattle contracts ended Thursday’s session lower as a sharp slowdown in beef processing weighed on the market, according to a Reuters report.
The US Department of Agriculture (USDA) estimated that meatpackers slaughtered 90,000 cattle, compared with 107,000 head one week earlier. The reduction in slaughter raised concerns about disruptions in the flow of cattle through the supply chain.
Labor Constraints Hit Kansas Beef Plants
Industry participants reported that slaughter activity has pulled back this week, citing an immigration crackdown that they said has reduced the availability of workers at beef processing facilities in Dodge City and Liberal, Kansas. With fewer workers on hand, shipments of cattle to these plants have been postponed, according to industry accounts, leading to delays in processing.
“Anything that causes a backup in processing is a concern in the industry,” said Scarlett Madinger, spokesperson for the Kansas Livestock Association. “We don’t want any kind of backup.”
CME Livestock Futures Performance
CME cattle and hog futures moved lower, reflecting the impact of processing challenges in cattle and fresh supply data in hogs.
| Contract | Exchange | Settlement Price | Move on Day |
|---|---|---|---|
| December live cattle | CME | 222.100 cents/lb | -1.250 cents |
| October feeder cattle | CME | 331.750 cents/lb | -1.575 cents |
| December lean hogs (most-active) | CME | 69.475 cents/lb | -0.850 cent |
US Hog Inventory Declines More Than Expected
Following the close of trading, the USDA released its latest estimates on US hog supplies. The agency reported that the total US hog herd stood at 74.3 million head as of September 1, representing a 1.5% decrease from the same date a year earlier.
Analysts polled by Reuters had anticipated a smaller year-on-year reduction of 0.8%, indicating that the reported contraction in the hog herd was larger than the market had expected.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
