Cattle futures fell to the lowest close this year as cash-market prices tumbled amid a boost in slaughter-ready cattle supplies.
Meatpackers bought cattle for $1.10 a pound live in Kansas and the western Corn Belt, along with dressed sales between $1.75 and $1.77 a pound. Prices fell sharply from last week, when sales averaged at $1.15 a pound live and $1.84 a pound dressed.
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That's increased the pressure on the cattle futures market, with traders betting that cash prices will fall further as cattle supplies increase in the fall. Slaughter number and average cattle weights have recently risen to multimonth highs, while analysts expect feedyards to continue producing large numbers of fat cattle amid an increase in placements.
Front-month August-dated live cattle contracts at the Chicago Mercantile Exchange fell 2.2% to $1.07125 a pound, the lowest close since mid-November.
Hog futures also fell on Thursday, extending a selloff that began a day earlier on a sharp drop in pork belly prices. Analysts say record-high belly prices on the back of strong demand for bacon has been one of the bright spots in the hog market.
A pound of pork belly fell 13.59 cents a pound to $1.8254 a pound on Wednesday, before steadying on Thursday morning. That in turn dragged wholesale pork prices lower too.
Analysts said hog futures fell through technical support indicators. CME October lean hog futures fell 2.7% to 66.925 cents a pound, the lowest point since early May.
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(END) Dow Jones Newswires
August 17, 2017 16:05 ET (20:05 GMT)