Cattle Extend Slump as Animal Demand May Slide; Hogs SteadyElizabeth Campbell
Cattle dropped for the fourth straight day, capping the longest losing streak since July, on speculation that animal demand is going to fall after Cargill Inc. said it will idle a beef plant. Hogs were unchanged.
The beef-processing plant in Plainview, Texas, will stop operations at the close of business on Feb. 1 as the U.S. herd shrank and feed costs climbed, Minneapolis-based Cargill said yesterday in a statement. Wholesale beef slumped 0.6 percent to $1.9102 a pound as of midday, the lowest since Oct. 10, government data show.
“The initial reaction from the industry is always there’s less demand for fat cattle because this packer shut down, and therefore that’s bearish for prices,” David Kruse, a commodity trading advisor at Commstock Investments Inc. in Royal, Iowa, said in a telephone interview.
Cattle futures for April delivery fell 0.8 percent to settle at $1.29825 a pound at 1 p.m. on the Chicago Mercantile Exchange. Yesterday, futures tumbled by as much as the 3-cent exchange limit to $1.297, the lowest for the most-active contract since Nov. 16.
The plant closing will “ultimately be friendly to the market,” because it means less beef production, Kruse said.
Feeder-cattle futures for March settlement rose 0.3 percent to $1.4635 a pound on the CME, the first gain since Jan. 4.
Hog futures for April settlement closed unchanged at 88.075 cents a pound in Chicago.