Cattle futures fell on Wednesday as traders bet that beef prices would trend lower after a Memorial Day bump.
The cattle market has rallied on the back of everything from seasonal grilling demand to a government agreement to reopen China to U.S. beef imports. Now, analysts say, futures traders have run low on optimism to buy on.
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"The bullish factors have already been priced in," said Craig Turner, senior broker at Daniels Trading in Chicago. "We could see further weakness in cattle for the next few weeks and months."
Live cattle futures for June delivery fell 0.8% to $1.22125 a pound on Wednesday at the Chicago Mercantile Exchange, while August feeder cattle futures dropped 1.9% to $1.48675 a pound.
Lower cash prices weighed on futures. Packers paid less for cattle than previous weeks at a closely watched online auction Wednesday morning. Around 1,300 cattle sold at an average of $1.33 a pound for delivery up to nine days out. That was down from $1.35 a pound last week, and further yet from $1.40 in early May.
Beef prices, which rose sharply ahead of big meat-eating holidays like Mother's Day and Memorial Day, also slid. Wholesale beef fell to $2.46 a pound on Tuesday from $2.48 the previous day, though inching higher on Wednesday morning. Packers have now secured the meat they need through Memorial Day weekend, analysts said.
Lean hog futures were mixed, with the front-month June contract closing up 0.1% at 80.2 cents a pound while later-month contracts fell.
Pork, which analysts say is well positioned to usurp beef as the retailers' red meat of choice this summer, rose to 89.75 cents a pound on Wednesday morning at the wholesale level.
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(END) Dow Jones Newswires
May 24, 2017 15:41 ET (19:41 GMT)