Chicago Mercantile Exchange (CME) cattle futures faced a downturn on Monday, relinquishing gains made after the holiday period. This decline was driven by worries over demand and reports indicating reduced beef consumption in Argentina amidst economic struggles, as reported by Reuters.
On the other hand, CME lean hog futures experienced a predominantly lower close, reflecting ongoing apprehensions regarding pork production surpassing consumer demand, according to traders.
A recent report from the Rosario exchange highlighted that Argentina’s beef consumption in 2024 is anticipated to hit its lowest level since records began in 1914. The nation’s economic challenges, including high inflation, recession, and escalating poverty and unemployment rates, have contributed significantly to this decline.
“The concern now is whether the excess beef will flood the export market,” remarked Karl Setzer, partner at Consus Ag. Traders also monitored the aftermath of Fourth of July beef demand, which showed subdued activity, alongside the broader weakness observed across commodity markets on the day.
Additionally, the strength of the US dollar exerted a bearish influence on livestock futures, as a robust dollar typically reduces the appeal of US commodities in international markets.
Despite these market pressures, wholesale boxed beef prices demonstrated some resilience. Data from the US Department of Agriculture indicated that the choice boxed beef cutout price rose by $1.53 to $331.96 per hundredweight (cwt) on Monday morning, while select beef was up $1.34 at $306.40 per cwt.
Closing figures for CME August live cattle contracts showed a decline of 2.075 cents, settling at 184.350 cents per pound. Meanwhile, CME August feeders concluded down 2.30 cents at 259.175 cents per pound.
In contrast, CME August lean hog futures managed a slight gain, closing up 0.35 cent at 89.525 cents per pound. However, October lean hog futures set a new contract low during the session, finishing down 0.95 cent at 72.525 cents per pound.
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