(Corrects today’s low price in fifth paragraph.)
Cattle futures fell the most in two weeks on concern that supplies available to U.S. beef processors will increase. Feeder cattle dropped to the lowest price since June, and hogs declined.
Cattle purchases by U.S. feedlots jumped 7.1 percent last month from a year earlier, adding 2.27 million head to herds, the most of any August since 2006, the U.S. Department of Agriculture said Sept. 17. Cattle prices in Chicago have fallen every day since the report, dropping 3.6 percent.
“That’s where the aftershock is coming,” from the unexpected feedlot expansion reported by USDA, said Paul Beere, a market adviser at Prime Agricultural Consultants Inc. in Brookfield, Wisconsin.
Cattle futures for December delivery fell 1.75 cents, or 1.7 percent, to 98.3 cents a pound at 11:07 a.m. on the Chicago Mercantile Exchange. A close at that price would be the biggest decline since Sept. 7. Earlier, cattle slid to 98.125 cents, the lowest price for a most-active contract since Sept. 9. Before today, futures jumped 16 percent this year.
Feeder-cattle futures for November settlement dropped 1.575 cents, or 1.4 percent, to $1.0945 a pound on the CME, and reached $1.09275, the lowest level for a most-active contract since June 10. Before today, the commodity gained 15 percent this year.
“Feeders are in a tough spot,” said Dennis Smith, a senior account executive at Archer Financial Services Inc. in Chicago. The rising corn prices are “a major factor against the feeder market” and are pressuring prices, he said.
Before today, corn futures climbed 22 percent this year, touching $5.2375 a bushel on Sept. 20, the highest level for a most-active contract since Sept. 30, 2008.
Hog futures for December settlement fell 0.65 cent, or 0.8 percent, to 76.425 cents a pound in Chicago.
Wholesale pork fell 0.5 percent yesterday to 91.43 cents a pound, USDA data show. Before today, hog futures climbed 17 percent this year and pork prices soared 36 percent.
“I’m expecting some more weakness” from pork prices “that will eventually translate into weakness in the cash-hog market,” Smith said. “I’m expecting a defensive trade as far as the hog-futures markets go.”
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