CME cattle futures backpedal from strong rallies
The markets surged last week as cash prices jumped more than many traders expected and Washington again halted imports of cattle from Mexico, limiting supplies.
Consumer demand for beef has largely remained strong this year, even as tight U.S. cattle inventories have reduced production and pushed prices to records.
Futures took a breather after rallying Friday, traders said.
CME August live cattle futures closed down 2.85 cents at 219.35 cents per pound after jumping 3.8% last week.
August feeder cattle sank 5.85 cents to end at 319.475 cents per pound. The contract soared 5% last week, as analysts said that cash prices increased by $4 to $8 per hundredweight.
The U.S. Department of Agriculture said on Wednesday that it would immediately block cattle imports from Mexico due to the spread of New World screwworm, a devastating livestock pest, after starting to resume imports days earlier. Some producers typically import Mexican cattle to fatten in U.S. feedlots and slaughter in U.S. processing plants.
Beef processors saw profit margins turn negative as they paid higher prices for cattle while beef prices declined.
Meatpackers were losing $43.20 for each head of cattle they processed on Monday, compared to profits of $73.95 a week ago, HedgersEdge.com said.
U.S. wholesale boxed beef prices remained under pressure after sliding late last week. Choice cuts fell by $1.57 to $377.07 per hundredweight (cwt), according to USDA data.
For pork, the wholesale U.S. carcass cutout price edged up $0.38 to $113.85 per cwt, the USDA said. Prices surged for pork bellies and sank for butts.
CME August lean hogs ended 1.45 cents lower at 103.225 cents per pound.
Meatpackers slaughtered an estimated 477,000 hogs, compared to 478,000 hogs a week ago and 474,933 hogs a year ago, according to the USDA.
Packers slaughtered an estimated 112,000 cattle, down from 114,000 cattle a week ago and 117,427 cattle a year ago, as inventories are low. (Reporting by Tom Polansek in Chicago; Editing by Mohammed Safi Shamsi)
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