US cattle futures slumps to 12-week low on dollar gains

Cattle futures dropped to a 12-week low and hogs plunged to the lowest price since March as gains in the dollar eroded the appeal of US commodities.

The dollar climbed to the highest level in 14 months against a basket of six major currencies including the euro, making US beef and pork more expensive for importers. Analysts estimates of 19 raw materials sank to a seven- month low, and global equities dropped on concern that Europe's debt crisis will derail economic recovery.

Cattle futures for August delivery slipped 0.8 cent, or 0.9%, to 91.2 cents a pound on the CME, after touching 91.15 cents, the lowest level for a most-active contract since February 16. Futures are up 11% in the past year.

Feeder-cattle futures for August settlement declined 0.925 cent, or 0.8%, to US$1.1205 a pound.

Wholesale choice beef was little changed at midday at US$1.6937 a pound, according to the U.S. Department of Agriculture. The price is down 1.2% from a 22-month high set on May 11.

Meanwhile, hog futures for July settlement sank 2.225 cents, or 2.7%, to 81.6 cents a pound on the CME, after touching 81.55 cents, the lowest price since March 29. The most-active contract has climbed 19% in the past year, as financial losses spurred farmers to cut herds.

Hogs also fell on speculation that the highest wholesale- pork prices in 21 months will curb US grocer buying.

Wholesale pork rose to 91.81 cents a pound on May 14, up 36% this year and the highest price since August 2008, USDA data show. Retailers may have finished stocking up on pork before the Memorial Day weekend at the end of this month, a time when many consumers grill outdoors, said Rich Nelson, the director of research at broker Allendale Inc.