Live cattle futures fell to their lower daily limit on Wednesday as traders bet on sharply lower cash prices.
Cattle sales on the cash market have been lower so far this week, with market-ready supply growing. Analysts also say consumer appetite for beef is also peaking as spring grilling demand eases in the muggy summer heat.
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Wednesday morning's online Fed Cattle Exchange auction platform faltered on technical difficulties for the second week running, leaving traders with little cash pricing by which to bet on futures direction. The U.S. Department of Agriculture reported sales on Tuesday for an average of $1.325 a pound for live cattle, a markdown of several cents from the previous week.
Traders sold cattle futures as contracts fell through technical support indicators. Live cattle for June delivery dropped 3 cents, or 2.4%, to $1.245 a pound at the Chicago Mercantile Exchange, hitting the bottom end of their daily trading band. August feeder cattle futures fell 3.9 cents, or 2.6%, to $1.46125 a pound.
Wholesale beef prices wobbled, falling on Tuesday before recovering half a cent on Wednesday morning to climb to $2.517 a pound.
Analysts said progress announced this week on a deal between Washington and Beijing to allow U.S. beef into China should boost exports, though its short-term impact may be limited as the industry adjusts production to meet Chinese requirements.
"The reopening of beef trade to China is a long-term bullish affair," said Dennis Smith of Archer Financial Services in Chicago.
Hog futures were steady as the CME contract for June delivery expired. July lean hog futures rose 0.4% to 82.575 cents a pound.
Lighter-weight hogs have strengthened futures, analysts say, though the selling in the cattle market has limited gains.
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(END) Dow Jones Newswires
June 14, 2017 15:08 ET (19:08 GMT)