June 4, 2010
US cattle, hog futures down amid falling wholesale costs
Cattle futures fell for the first time in three days and hog futures dropped as sliding wholesale-meat prices in the US signalled demand may be shrinking.
Choice beef slipped 0.8% at midday on June 3 to US$1.6231 a pound, the lowest level since March 23, USDA data show. Wholesale pork tumbled to a six-week low on June 2 at 85.85 cents a pound. The Standard & Poor's 500 Index fell as much as 0.6% before rebounding, and the dollar gained, eroding the appeal of US meat exports.
''Wholesale beef is not looking good, and on top of that, we've got stocks down, and the dollar working from lower to higher,'' said Mark Schultz, a vice president at Northstar Commodity Investment Co. in Minneapolis.
A lower beef price does not bode well for pork either because the meats compete for customers, he said.
Cattle futures for August delivery fell 0.625 cent, or 0.7%, to 90.125 cents a pound on the Chicago Mercantile Exchange. The commodity tumbled 5.3% last month, while the dollar rose 5.8% against a basket of major currencies.
Feeder-cattle futures for August settlement were little changed at US$1.09675 a pound.
Hog futures for July settlement fell 0.55 cent, or 0.7%, to 81.625 cents a pound. The price tumbled 4.3% last month on bets that global pork demand would drop.
The dollar's advance may spur livestock speculators to unwind bets on a price increase, Schultz said. As of May 25, hedge funds and other large speculators cut so-called net-long positions in cattle by 20% from a record on April 20, and hog net-longs tumbled 34% from a record on May 4, government data show.
