U.S. livestock futures fell Thursday as both the pork and beef industries faced uncertainty about autumn meat demand.
CME cattle for October delivery fell 0.42 cent, or 0.4%, to $1.136 a pound in trading at the Chicago Mercantile Exchange. CME December cattle traded lower by 0.47 cent, or 0.4%, to $1.1542 a pound. Feeder cattle for September rose 0.3c, or 0.2%, to $1.3275 a pound.
Cattle futures were pressured by weak wholesale beef prices, inactive cash markets and a broad-market sell-off tied to concerns about meat demand in the fall. The Dow Jones Industrial was off 99 points to 11544 after more signs pointed to a sideways U.S. economy.
Investors have been concerned that economic troubles could lead to lower demand for beef, said Rich Nelson, director of research at brokerage Allendale.
Daily U.S. Department of Agriculture wholesale beef prices have fallen rather sharply in recent days after meat packers finished filling retailers' orders for the Labor Day holiday weekend, which typically kicks off the fall grilling season. Although the daily USDA prices capture a small portion of the total beef trade, their recent downward trajectory, like those for hogs, has unnerved traders in the complex.
Many analysts say the aftermath of Hurricane Irene has weighed on demand since consumers on the East Coast are grilling less and dining out less frequently as the region recovers.
USDA's midday boxed beef price quote for choice grade carcasses was down 35 cents to $182.44 a hundred pounds. Select beef prices rose 99 cents to $175.36 a hundred pounds on total reported sales of 113 total loads. Both prices have fallen sharply in the last week.
Futures were also pressured by inactive cash cattle markets, as a standoff over prices among owners and packers pushed the week's trade into Friday. Although packers have been emboldened to bid lower due to falling beef prices, owners know that processors are currently making healthy profits for each head of cattle they slaughter.
The latest HedgersEdge packer margin index was plus $40.90 a head, compared with $52.70 the previous day. This is an estimate of packer returns on cattle slaughtered and processed expressed in the form of an index.
Cash cattle bids of $1.10 to $1.11 a pound on a live-weight basis in the Texas Panhandle and Kansas continue to be passed by owners who are pricing their animals at $1.14 or more.
Bids in Nebraska were reported at $1.10 a pound live and mostly $1.77 a pound dressed. Cattle feeders were asking $1.80 a pound or more on a dressed basis.
For the week, only about 4,000 head have traded in eastern Nebraska and Iowa/Minnesota, with about half of those on Wednesday from $1.77 to $1.78 a pound dressed and $1.11 to $1.14 a pound live. Prices there last week were mostly from $1.79 to $1.81 dressed and $1.12 to $1.14 live.