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CME update: cattle futures dip as beef supply increases

12 June 2020

US live cattle futures sank on 11 June as beef production and processing rebounds.

Reuters reports that CME August live cattle dipped 0.050 cents to 96.450 cents. August feeder cattle futures closed 0.500 cents lower at 132.175 cents per pound.

Traders expect meat packers to have an abundant supply of livestock to slaughter after animals backed up amid meat plant closures this spring. Processing plants closed in April and May due to COVID-19 outbreaks among workers, causing producers to keep market ready hogs on farm.

Though many plants have resumed operations, many are operating at reduced capacity.

The US Department of Labour reported that meat prices surged 40.4 percent in May as plant shutdowns and slowdowns from COVID-19 limited production.

In the USDA monthly report, forecasts for 2020 red meat and poultry production increased. The agency cited "a faster-than-anticipated recovery in the pace of slaughter" of hogs and cattle.

Commenting on the trend, Brian Hoops, president of US broker Midwest Market Solutions said, “we’re not going to get into a situation where we have smaller supply that would force the market higher. We think rallies should be sold.”

Read more about this story here.



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