CHICAGO, March 6 (Reuters) – Chicago Mercantile Exchange live and feeder cattle futures settled lower on Friday as managed money exited their long positions ahead of the weekend and following a disappointing jobs report and expectations of higher inflation, analysts said.
CME April live cattle futures closed 3.95 cents lower to 234.575 cents per pound. April feeder cattle closed 7.375 cents lower at 351.625 cents per pound.
The conflict raging in the Middle East has threatened to fuel inflation, and U.S. jobs data released on Friday morning showed the economy unexpectedly shed jobs in February.
“When you see this sort of move, it’s a risk-off event going into the weekend,” said Altin Kalo, economist at Steiner Consulting. “The negative news about the economy, the spike in oil prices and higher inflation — how is that going to squeeze the consumer and how is that going to impact demand for a pricey protein?”
Consumer demand for beef, typically the most expensive protein on grocery store shelves and in restaurants, can be swayed if consumers are feeling financially unsteady.
However, boxed beef prices so far have remained strong, despite high prices.
For boxed beef, the U.S. Department of Agriculture reported that values for choice cuts rose by 18 cents to $387.07 per hundredweight on Friday, while select cuts fell by 54 cents to $380.07 per hundredweight.
Beef packer margins have mostly improved throughout the week on softer cash cattle prices, though margins still remain deeply in the red. The average beef packer margin on Friday was estimated at a negative $118.25 per head, compared with a negative $262.50 per head a week ago, according to livestock marketing advisory service HedgersEdge.
Lean hog futures chopped up and down in a mostly technical trade and settled slightly lower.
CME April hogs closed 0.05 cent lower to 95.625 cents per pound. (Reporting by Heather Schlitz; Editing by Chizu Nomiyama)
