July 8, 2020

US cattle and swine futures fall as supplies increase

Analysts said large supplies of cattle and swine are affecting United States cattle and swine futures as it ended lower on July 7, Reuters reported.

After nearly reaching a two month high, live cattle futures have dropped but feeder cattle resurged slights after hitting their highest price in more than a month on July 5.

Matt Wiegand, commodity broker for FuturesOne said analysts have overbought on cattle.

Live cattle futures on the Chicago Mercantile Exchange (CME) ended 0.100 cents lower at 100.000 cents per pound. Feeder cattle in August dropped 1.225 cents to 134.925 cents per pound.

CME lean hogs closed 0.400 cent at 48.857 cents per pound. October hog numbers ended 48.625 cents per pound, down 0.425 cent.

The US Department of Agriculture (USDA) said there were 11.7 million head of cattle in feedlots by June 1, the second highest inventory of cattle since records were conducted from 1996.

Major meat processors such as JBS USA and Tyson Foods are working through a backlog of livestock supplies stuck in feedlots after meat plants were shut down temporarily due to COVID-19. While many plants have reopened, they are operating at reduced capacity either due to social distancing measures on the production floor or absent workers.

On July 7, the USDA said meat companies slaughtered 119,000 cattle compared to 124,000 daily in March, before the temporary plant closures. 469,000 swine were slaughtered on July 7, compared to 498,000 daily in March.

Livestock marketing advisory service HedgersEdge.com said margins per head of cattle increased from US$305.70 to US$308.45 for beef processors. As for pork packers, margins dropped from US$61.70 to US$60.25 per swine.

-      Reuters