By Tom Polansek
CHICAGO, Oct 12 (Reuters) – Chicago Mercantile Exchange live cattle futures ended lower on Tuesday, after the U.S. Department of Agriculture slightly increased its forecasts for beef production this year and next year.
The USDA, in a monthly report, raised its 2021 estimate by 0.3% from September because of higher cow slaughtering and heavier average carcass weights. The projection for 2022 production rose by 0.4%.
The USDA also lowered its forecast for 2021 fed cattle prices due to large supplies. The 2022 price forecast increased, after ranchers have reduced their herd sizes in recent years.
“It’ll be next year when the market really starts feeling the pain as far as tightening supplies,” said Rich Nelson, chief strategist for commodity broker Allendale.
Most-active December live cattle futures LCZ1 settled down 0.925 cent at 129.250 cents per pound. February live cattle LCG2 slipped 0.625 cent to 134.250 cents per pound.
Choice cuts of boxed beef fell by 5 cents to $281.07 per cwt, while select cuts dropped by $2.29 to $261.35 per cwt, according to daily USDA data.
In CME’s feeder cattle market, futures finished higher as grain futures declined. The USDA’s monthly report raised the government’s estimates for the harvests of corn and soybeans used for animal feed. GRA/
Most-active November feeder cattle contract FCX1 crept 0.075 cent higher to 161.800 cents per pound, while the January contract FCF2 advanced 0.675 cent to 162.775 cents. Both contracts reached their highest prices since Sept. 8.
CME’s most-active December lean hogs contract LHZ1, meanwhile, fell to its lowest price since Sept. 24. The contract ended down 2 cents at 78.175 cents.
The USDA raised its U.S. pork import forecasts for this year and next year because of increased supplies on the global market. The U.S. pork export forecast was cut for 2021 because of weaker demand from China, the world’s top pork consumer, but raised for 2022.
(Reporting by Tom Polansek; Editing by Shailesh Kuber)
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