CME Cattle Prices Decline Amid Heavy Liquidation and Disappointing Labor Market Data

Cattle Futures Decline Amid Economic Concerns

On March 6, the Chicago Mercantile Exchange (CME) live and feeder cattle futures settled lower due to managed money exiting long positions ahead of the weekend and in response to a disappointing jobs report and expectations of higher inflation.

CME April Live Cattle Futures closed at 234.575 cents per pound, down 3.95 cents from the previous settlement. April Feeder Cattle closed at 351.625 cents per pound, down 7.375 cents.

The ongoing conflict in the Middle East has raised concerns about inflation, and the latest U.S. jobs data showed a surprise decline in February. This negative economic news, combined with rising oil prices and inflation expectations, has led to a risk-off event, affecting consumer demand for beef.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Boxed Beef Prices have remained strong, with the U.S. Department of Agriculture reporting a 18-cent increase in values for choice cuts to $387.07 per hundredweight on Friday. Select cuts fell by 54 cents to $380.07 per hundredweight.

Beef Packer Margins have improved throughout the week due to softer cash cattle prices, but remain deeply in the red. The average beef packer margin on Friday was estimated at a negative $118.25 per head, compared to a negative $262.50 per head a week ago, according to HedgersEdge.

Lean Hog Futures settled slightly lower, with CME April Hogs closing at 95.625 cents per pound, down 0.05 cent from the previous settlement.