Lower prices for physical cattle sent the futures market lower on Wednesday.
The U.S. Department of Agriculture said that meatpackers paid from $117 to $118 per 100 pounds on a live basis and $187 dressed for slaughter-ready cattle on Wednesday, adding to sales averaging $189 dressed and $119 live a day earlier. No cattle traded at the online Fed Cattle Exchange auction on Wednesday morning.
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Cash prices were below last week's averages of $120.50 live and $190 dressed, and analysts expected the cash market to continue lower through the week.
Those prices were nevertheless at a premium to futures, which have fallen sharply in recent days as speculative investors like hedge funds pull away from bets that cattle futures would rise.
December live cattle contracts fell 0.5% to $1.159 a pound at the Chicago Mercantile Exchange on Wednesday, down 4% since they started trending lower last week.
Some traders are concerned that demand for beef will not be able to keep up with the large numbers of cattle being fattened for slaughter in the first half of next year. A series of government reports have shown feedlots placing more cattle on-feed for fattening than expected.
In particular, they say beef prices have not held up in the face of growing supplies. Wholesale beef fell $2.26 to $206.82 per 100 pounds as of midday Wednesday after rising earlier this week.
Hog futures also fell, dragged lower by speculative selling in the cattle market. CME December lean hog contracts slid 0.7% to 63.825 cents a pound.
Wholesale pork prices fell $1.34 to $83.44 per 100 pounds. Cash prices have started the week mixed, and were expected steady to lower in Wednesday's trade.
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(END) Dow Jones Newswires
December 06, 2017 15:10 ET (20:10 GMT)