CHICAGO, Dec 12 (Reuters) – Chicago Mercantile Exchange (CME) cattle futures turned lower on Friday on profit taking, inflation concerns and mixed wholesale prices, brokers said.
Feeder cattle futures fell during the trading session, after cattle futures jumped to their highest levels on Thursday since late October – following a jump in cash prices for slaughter-ready cattle, market analysts said.
Meanwhile, cattle futures were also pressured by news that JBS will permanently close a facility outside Los Angeles that prepares beef for sale at U.S. grocery stores, as tight cattle supplies have raised costs for meatpackers.
The world’s largest meat company said on Friday it will shut its Swift Beef Company facility in Riverside, California, on February 2, eliminating 374 jobs, according to a notice from the state’s Employment Development Department.
Beef prices set record highs this year after ranchers slashed the U.S. cattle herd to its lowest level in decades due to a persistent drought that dried up pasture lands. A halt on U.S. imports of Mexican cattle tightened supplies further, as Washington sought to keep out a flesh-eating parasite.
The U.S. Department of Agriculture on Friday morning priced choice cuts of beef at $357.26 per cwt, down 85 cents from a day earlier, and select cuts rose $1.32 to $344.78 per cwt.
Meanwhile, meat packers’ profit margins continued to drop. Denver-based livestock marketing advisory service HedgersEdge.com calculated that beef packers were losing $78.20 per head of cattle as of Friday.
CME February live cattle settled 1.400 cents lower at 229.550 cents per pound. CME January feeder cattle ended 4.300 cents lower at 339.100 cents per pound.
Hog futures turned mostly higher, as wholesale pork values were mixed. CME benchmark February lean hog futures settled up 0.350 cent at 84.525 cents per pound. The USDA priced pork carcasses on Friday morning at $98.54 per cwt, down 30 cents from Thursday. (Reporting by P.J. Huffstutter; Editing by Krishna Chandra Eluri)
