Cattle futures tumbled the most in five months on signs of slowing demand from U.S. meatpackers as beef prices drop. Hogs also fell.
Slaughterhouses purchased 1.96 million animals from feedlots last month, down 4.5 percent from a year earlier, the U.S. Department of Agriculture said in a report on Sept. 21. Thirteen analysts in a Bloomberg News survey forecast a 1.6 percent decline, on average. In the previous two sessions, wholesale beef prices dropped 1.2 percent, the most since July 20.
“This cattle market is under a little bit of pressure,” Lane Broadbent, a vice president at KIS Futures in Oklahoma City, said in a telephone interview. “We’re not marketing cattle as well as we should have.”
Cattle futures for December delivery fell 2 percent to settle at $1.258 a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest drop for a most-active contract since April 24. Earlier, the price tumbled by the CME limit of 3 cents $1.254, the lowest since Aug. 30. The commodity has climbed 3.6 percent in 2012.
Yesterday, wholesale beef fell 0.3 percent to $1.9269 a pound, the lowest since Sept. 14, government data show. The price, little changed today at $1.9276, has dropped 1 percent this year.
Spot steers averaged $1.2532 a pound last week, down 0.5 percent from a week earlier, USDA data show.
Feedlot operators buy year-old animals that weigh 500 pounds (227 kilograms) to 800 pounds, called feeders. The cattle are fattened on corn for about four to five months until they weigh about 1,200 pounds, when they are sold to meatpackers.
Feeder-cattle futures for November settlement fell 1.5 percent to $1.46525 a pound on the CME, the biggest drop since July 25.
Hog futures for December settlement declined 0.9 percent to 74.65 cents a pound. The price has dropped 11 percent this year.