July 27, 2010
US cattle futures fall on signs of lower demand
US cattle futures fell to a one-week low on speculation that slumping beef prices signal shrinking US demand.
Wholesale choice beef dropped to a one-week low at US$1.546 a pound at midday. On July 23, processors shipped 3.02 million pounds, the lowest amount in three weeks, government data show. Demand tends to slow in late July and early August as summer temperatures peak and fewer people grill outdoors, analysts said.
Cattle futures for October delivery fell 0.9 cent, or 1%, to 93.825 cents a pound at 11:34 a.m. on the CME. Earlier, the price touched 93.75 cents, the lowest level since July 19. Feeder-cattle futures for August settlement fell 0.175 cent to $1.15 a pound.
A USDA report showing that feedlots last month bought fewer young animals than estimated may have kept futures from falling further. Feedlots boosted cattle purchases by 17% last month to 1.628 million head, less than the 19% jump forecast by analysts.
According to analysts, the beef-cow herd on July 1 was the smallest since at least 1973 after farmers lost money the past two years. The USDA issued the data on July 23 after livestock markets closed in Chicago.
Meanwhile, hog futures for October settlement fell 1.325 cents, or 1.7%, to 75.7 cents a pound. Last week, the most-active contract climbed 1.8%, the first increase since June.
Wholesale pork fell 0.3% to 85.26 cents a pound, the first drop in five days, and the price of hogs for immediate delivery to slaughterhouses slid 1.6%.
