CME livestock futures decline amid seasonal demand drop, production disruption

USA – Both live and feeder cattle futures at the Chicago Mercantile Exchange (CME) saw declines, driven by trader expectations of a typical seasonal reduction in meat packer demand for livestock, as reported by Reuters.

The number of cattle slaughtered by meatpackers was estimated at 115,000, according to U.S. government data, a decrease from the past week’s count of 119,000 and steady compared to the previous week.

“Demand usually tapers off as we approach the Fourth of July,” remarked Don Roose, president of U.S. Commodities, highlighting a common seasonal trend.

On the trading floor, CME August live cattle futures closed at 184.275 cents per pound, down by 1.15 cents. 

Similarly, August feeder cattle futures decreased by 1.925 cents, settling at 257.375 cents per pound.

In contrast, wholesale boxed beef prices experienced an uptick, according to the U.S. Department of Agriculture’s (USDA) afternoon cutout report. 

Choice cuts rose by $2.86, reaching $329.18 per hundredweight (cwt), while select cuts increased by $1.91 to $306.41 per cwt.

“Consumers continue to purchase expensive beef,” noted Roose. “They are choosing beef over pork despite the higher prices.”

The USDA also reported a decline in pork cutout values.

Carcass prices dropped to $95.41 per cwt, a decrease of US$2.48, and belly prices fell by US$6.41.

CME August lean hog futures also experienced a decline, closing 1.325 cents lower at 88.175 cents per pound.

In a significant development, Cargill, one of the top four beef processors in the United States, announced a halt in operations at its Dodge City, Kansas, beef plant. 

This suspension followed a partial roof collapse caused by weekend rainfall. 

Although a prolonged shutdown could potentially impact cattle demand for slaughter, Cargill assured that it would leverage its extensive supply chain to mitigate any disruptions to its customers and producers.