Cattle futures declined to a one-month low on signs of increasing U.S. beef supplies. Hog prices rose the most in two weeks.
On Aug. 24, wholesale beef fell the most in five weeks, and meatpackers processed 653,000 cattle last week, up 1.6 percent from a week earlier, U.S. Department of Agriculture data show. Farmers are doing “the reverse” of expansion, liquidating older cows and unproductive animals amid high feed costs, said Dennis Smith, an analyst at Archer Financial Services.
“The beef is topping off,” Smith said in a telephone interview from Chicago. “I expect pressure in beef in cash and futures.”
Cattle futures for October delivery slid 0.8 percent to settle at $1.23475 a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest decline since Aug. 16. Earlier, prices reached $1.234, the lowest since July 27.
On Aug. 24, wholesale beef fell 0.9 percent to $1.9214 a pound, the biggest decline since July 19, USDA data show.
More than 35 percent of the Midwest was in extreme drought as of Aug. 21, according to the U.S. Drought Monitor. Corn, the main ingredient in livestock feed, surged 60 percent from June 15 through Aug. 24 on the Chicago Board of Trade.
Feeder-cattle futures for October settlement dropped 0.3 percent to settle at $1.43925 a pound on the CME.
Hog futures for October settlement rose 1.2 percent to settle at 73.25 cents a pound. That’s the biggest increase since Aug. 13.