CME update: cattle futures sag as US cold snap stalls slaughter operations
US cattle futures dropped on 17 February as wintry weather and power outages hampered meat-packing operations, slowing the pace of slaughter and reducing demand for market-ready animals.
18 February 2021
1 minute read
Reuters reports that CME April live cattle futures settled down 1.650 cents at 124.150 cents per pound, while the spot February contract ended down 85.0 cent at 115.300 cents per pound.
CME March feeder cattle fell 2.350 cents to settle at 138.425 cents per pound.
Cargill Inc said meat plants in three Texas cities would be idled through Thursday because a local utility company has curtailed natural gas availability after a cold snap hit the state.
A spokeswoman for Tyson Foods Inc said on Tuesday that the firm had suspended or scaled back operations at some facilities.
"Once the news began to circulate that those slaughter plants were not going to be open until Friday ... the traders just assumed we are not going to get higher cash (prices), if they don't need the animals," said Dan Norcini, an independent livestock trader.
The US Department of Agriculture on Wednesday reported the week-to-date cattle slaughter at 269,000 head, a significant drop from 345,000 head for the same period a week earlier.
However, wholesale beef prices firmed in response to tightening supplies. Prices for choice cuts of boxed beef rose $2.74 to $237.51 per cwt on Wednesday, while select cut prices surged $3.61 to $225.64 per cwt, according to the USDA.
Read more about this story here.
Source: Reuters
