U.S. livestock futures fell Friday after a worse-than-expected unemployment report renewed fears about the American economy.
Cattle for August delivery fell 0.07 cent, or essentially flat, to $1.147 a pound in trading at the Chicago Mercantile Exchange. Cattle for October fell 1.02 cents a pound, or 0.8%, to $1.202. Feeder cattle for August fell 0.3 cent, or 0.2%, to $1.436 a pound.
The poor jobless report brought a halt to the momentum of cattle futures, which had risen sharply Thursday as traders and brokers said big funds and investors were placing bullish bets on cattle prices for the rest of the year. Unemployment levels are a key factor for meat producers since consumers typically pare back their spending on food as household income falls.
"The unemployment numbers...took some wind out of the cattle and, later in the day, out of the hogs as well," said Mike Zuzolo, president of researcher Global Commodity Analytics & Consulting.
Prices fell despite a new round of cash deals that show meat packers' demand for slaughter-ready cattle remains strong. Traders had been awaiting the first cash deals of the week for evidence of consumers' demand for beef during the summer weeks between the Fourth of July and Labor Day, when sales typically slow as hotter weather deters consumers from grilling meat.
Cash cattle trading developed Friday at $1.1450 to $1.15 a pound in the Texas Panhandle and Kansas, up 2 to 3 cents a pound from sales a week ago. Sales volumes were estimated around 15,000 head to 17,000 in the Texas Panhandle and over 25,000 in Kansas.
In Nebraska, prices on a dressed basis were reported mostly from $1.84 to $1.85 a pound with a few at $1.83 a pound, up from the bulk of sales last week at $1.80 a pound. Sales prices on a live basis were from $1.15 to $1.155 a pound, up generally 3 cents a pound from a week ago. Around 30,000 head traded on the day.
USDA's midday beef price quote for choice grade carcasses was off 48 cents to $179.19 a hundred pounds, and select fell 11 cents to $174.06 a hundred pounds on 198 total loads.
The latest HedgersEdge packer margin index was plus $31.75 a head, compared with $24.90 the previous day. The week's average margin index was plus $24.90 a head. This is an estimate of packer returns on cattle slaughtered and processed expressed in the form of an index.