--Cattle futures extend decline as traders gauge supplies
--Lower recent volume of cash cattle sales and cheaper feed seen
adding to supply pressure
--Hog futures decline on selling pressure across the livestock
markets
By Kelsey Gee
CHICAGO--U.S. cattle futures are extending a recent slump
Monday, retreating from gains earlier in the session as market
watchers anticipate supplies to swell in the months ahead as
nutrient-rich, freshly harvested corn and soybeans become available
to livestock producers.
October live-cattle futures are down 0.3 cent, or 0.2%, to
$1.55975 a pound at the Chicago Mercantile Exchange, after sliding
2.2% over the past week. Most-active October feeder cattle are down
0.675 cent to $2.2525 a pound.
Cattle futures and cash market prices have fallen under pressure
amid signs of weaker-than-expected demand for wholesale beef
products. Though production has been restrained in recent weeks,
which has pinched supplies of burgers and steaks available to
grocery stores and restaurants, prices have barely budged--an
indication that buying interest remains tepid, analysts have
said.
Processors in the cash markets this month have purchased fewer
head of cattle as margins have come under pressure, fueling ideas
that supplies could grow in the weeks ahead if producers have held
back from marketing animals at lower prices. Declining costs for
staple feed ingredients have also made it easier for feedyard
operators to grow cattle to heavier weights, adding to the volume
of beef available from a smaller pool of animals.
"Seasonally, supplies of cattle and hogs from mid-September to
mid-November tend to get heavier so traders are taking some of the
top off of [livestock] prices in anticipation of that pressure,"
said Mike Zuzolo, president of Global Commodity Analytics &
Consulting, based in Atchison, Kan.
Although packers bought cattle in a range from $1.61 and $1.62 a
pound in the cash markets late Friday-which is still five to six
cents higher than the October live-cattle futures contract-demand
caution is curbing fresh buying interest in the futures market.
Hog futures are also falling, pressured by selling across the
livestock markets. October hog futures are down 0.15 cent to
$1.0555 a pound. December hogs are down 0.7 cent, or 0.7%, to 95.60
cents a pound.
-Write to Kelsey Gee at kelsey.gee@wsj.com
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