CHICAGO, June 24 (Reuters) – U.S. live cattle tumbled more than 2 percent on Friday, extending the week’s losses to the largest in about two months, as investors liquidated holdings following Britain’s referendum vote to exit the
European Union, traders and analysts said.
Feeder cattle futures also fell sharply while lean hogs notched smaller declines at the Chicago Mercantile Exchange. Selling in each contract came ahead four U.S. Department of Agriculture livestock reports due at 2 p.m. CDT (1900 GMT).
“Obviously this is a risk-off day, with what we have going on in equity and energy markets,” said Craig VanDyke, analyst at brokerage Top Third Ag Marketing. “This has nothing to do with supply and demand (of cattle or hogs).”
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Equities were on pace for their largest daily losses in months, weighing on cattle prices as consumers may reduce purchases of luxury goods such as pricy steaks due to poorer returns in stock markets. The dollar also surged against a basket of currencies, making U.S. commodities less competitive in global markets.
Most-active CME August live cattle settled 2.975 cents lower at 110.875 cents per lb, bringing the week’s losses to 2.6 percent, the most since April. The contract briefly declined by its daily limit of 3.000 cents.
CME August feeder cattle eased 2.925 cents to 139.450 cents per lb. Feeders gained 1.5 percent for the week, snapping what had been a three-week run of declines.
Lean hogs for August delivery settled 0.475 cent lower at 84.975 cents per lb. The weekly drop of 4.7 percent was the largest in the lifetime of the contract.
USDA was set to release quarterly Hogs and Pigs, monthly Cattle on Feed and Cold Storage reports as well as a longer-term cattle overview.
