July 1, 2011
US cattle futures plummet
Bets on bigger-than-expected corn volumes to lessen feed prices caused US cattle futures to plummet to the lowest in about two weeks, thus, encouraging US producers to increase their herd.
US hogs also decreased.
About 92.282 million acres (37.3 million hectares) of corn were planted, the USDA said yesterday (Jun 30), up from 92.178 million forecast in March following a survey of farmers' intentions. The grain is a primary ingredient in livestock feed.
"This is a knee-jerk reaction to the grain report," said David Kruse, the president of CommStock Investments Inc. in Royal, Iowa. "What a lot of people feared is these high grain prices would ultimately reduce pork and beef production."
Cattle futures for August delivery fell 0.875 cents, or 0.8%, to US$1.107 a pound on the Chicago Mercantile Exchange. Earlier, the price touched US$1.096, the lowest since June 17.
The most-active contract gained 3% this year through yesterday. Before yesterday, the price dropped 7.8% this quarter, which ends yesterday.
Feeder-cattle futures for August settlement rose 1.6 cents, or 1.2%, to US$1.39375 a pound. Before Thursday (Jun 30), the most-active contract declined 2.4% since March 31.
Hog futures for August settlement fell 1.1 cents, or 1.2%, to 92.075 cents a pound. Before yesterday, the price plunged 10% this quarter. The commodity is still up 17% this year before Thursday.
