Chicago Mercantile Exchange (CME) cattle futures declined for a third straight session on Friday, influenced by technical trading that briefly pushed the most-active August live cattle contract to a two-week low, according to a Reuters report.
Analysts attributed the decline to growing concerns over future beef demand. Additionally, shifts by hedge funds, which have held long positions in the cattle market, contributed to the slump as they booked profits at the end of the month and adjusted their positions for the summer, traders noted.
Independent livestock trader Dan Norcini pointed out that increased live cattle weights have also pressured futures in recent weeks. Slaughter-ready animals have been weighing in at 40 pounds heavier or more compared to last year, exacerbating the downward trend.
Further weighing on the market, boxed beef cutout prices declined on Friday afternoon, leading market participants to speculate about summer demand for US beef. The choice boxed beef cutout value dropped 84 cents to $313.20 per hundredweight (cwt), while select cuts fell 81 cents to $301.71 per cwt, according to the US Department of Agriculture.
“The question everyone is asking is, have prices peaked?” Norcini remarked.
In contrast, lean hog futures saw an uptick as a significant rise in weekly US pork exports provided a bullish boost at week’s end, traders reported.
“There’s been talk in the market that the hogs were oversold, and that funds had pushed hog futures prices down too aggressively, especially given the recent stability in pork cutout prices,” Norcini said.
The most-active CME July hog futures rose by 0.175 cents, closing at 97.125 cents per pound. Meanwhile, CME August live cattle futures fell by 1.325 cents, settling at 178.450 cents per pound, and June live cattle futures decreased by 1 cent to 181.550 cents per pound. August feeder cattle futures ended the session down 2.675 cents, at 256.400 cents per pound.
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