CME update: live cattle futures sink amid larger Wall Street retreat
US live cattle futures fell more than 2 percent on 4 January, pressured by ample beef supplies and fund-driven selling as Wall Street equities declined.
Reuters reports that the sag in livestock markets comes amid a hike in grain prices.
Feeder cattle futures fell as well, dropping by 3 percent as US corn futures rose to almost $5 a bushel for the first time since 2014, threatening cattle feeding margins.
Chicago Mercantile Exchange (CME) February live cattle futures settled down 2.725 cents at 112.300 cents per pound and CME March feeder cattle fell 4.200 cents to end at 136.025 cents per pound.
"Feeder cattle may have pulled the live cattle down," said Doug Houghton, analyst at Brock Capital Management.
Worries about surging coronavirus cases weighed on global equity markets, a factor that tends to raise uncertainty about US consumer demand for beef.
Wholesale beef prices rose on 4 January, but ample supplies of cattle signalled a headwind, with average weights running higher than a year ago.
"Once we get into the second quarter (of 2021), there should be a drop-off, but right now, the live cattle market is looking at some big first-quarter supplies," Houghton said.
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Source: Reuters