CME update: live cattle futures sink as slaughter rate rises
21 May 2020
US live cattle futures dipped on 20 May due to oversupply despite reopened processing plants.
CME June live cattle futures contract settled down 0.375 cent at 98.40 cents per lb, while August live cattle ended 1.45 cents lower at 97.625 cents per lb.
Feeder contracts were weaker, with August’s contract slipping 2.925 cents to 129 cents per lb.
On 20 May, the USDA reported the daily cattle slaughter at 101,000 head – the highest since 8 April.
“We’re still backing cattle up. While the slaughter is improving, we’re not there yet. Not even close,” said Dennis Smith, livestock analyst at Archer Financial.
Slaughter numbers remain well below pre-coronavirus pandemic averages, as COVID-19 outbreaks at slaughter facilities have led to plant closures, backing up hogs and cattle at the farm level.
President Donald Trump said on Tuesday the United States should consider terminating trade deals under which it imports cattle as the federal government moves to help agricultural producers hard hit by the coronavirus outbreak.