Cattle Futures Continue to Slump

U.S. cattle futures extended their weeks-long slump Friday, falling to a fresh 1 1/2-year low on worries about weaker-than-normal demand for pricey steaks and roasts as retailers stock up on fall meat features in the weeks ahead.

October cattle futures shed 0.85 cent, or 0.6%, to $1.36 a pound at the Chicago Mercantile Exchange, the lowest closing price since May 2014, and 3.3% lower than last Friday’s settlement. Live-cattle futures for December fell 0.95 cent to $1.38 a pound. Feeder-cattle futures for September declined 0.4 cent to $1.92 a pound, also a 1 1/2-month low for the front-month contract, and a 3.9% drop on the week.

Cattle futures have been weighed down in the past week by worries that the steep cost of steaks and roasts will deter grocery store and restaurant buyers from loading up on seasonal meat items as they normally do during this time of year, and will instead opt for cheaper proteins such as pork and poultry.

Investors on Friday seized on a nearly $9 drop in the beef market in the past five days, which has served as evidence of lackluster demand and given packers little incentive to bid aggressively for cattle in the cash markets this week.

Hog futures also ended mostly lower. October hog futures advanced 0.475 cent, or 0.7%, to 71.05 cents a pound, the highest closing price in a month, for a 5.5% gain on the week. December futures fell 0.2 cent to 64.15 cents a pound. All other contracts declined.

 

Prices of U.S. corn and soybean futures dropped on Friday, reflecting progress of the U.S. harvest and on continued concern about demand for the crops. Wheat prices rose.

Soybean prices fell to a fresh six-and-a-half year low, declining as favorable weather graced the U.S. Midwest, with rainfall and warm temperatures combining to aid late-maturing crops prior to harvest. So far, crop-yield reports for soybeans have been better than for corn, and growers also have begun marketing newly-collected crops, which is pressuring prices, analysts said.

Concern over overseas demand for domestic soybean supplies also lingered, with worries over the troubled economy in China, the top buyer of U.S.-grown soybeans, more pronounced after the U.S. Federal Reserve said on Thursday that it would hold off raising interest rates. The Fed’s decision followed recent tumult in global financial markets that was prompted in part by a slowdown in China and which reflects U.S. officials’ worries that slow growth overseas could harm the American economy, including exports.

Soybean futures for November fell 17 1/4 cents, or 2%, to $8.67 1/4, the lowest closing price since March, 2009.

Corn prices declined for a fourth consecutive session, buffeted by the U.S. harvest’s progress and slow foreign demand for the crop. Falling crude oil prices also weighed on prices for the grain, as lower crude prices often reduce the incentive for refineries to blend fuel additives like corn-based ethanol into gasoline, potentially curbing domestic demand for the crop.

Wheat prices rebounded after falling for three straight days, bolstered in part by a recent wheat tender by Egypt, the world’s largest wheat importer. Though U.S. wheat likely won’t be competitive in the call for shipments from international suppliers, evidence of world demand was sufficient to shore up prices, analysts said. Ukraine’s wheat was the lowest-priced on offer.

CBOT December wheat rose 5 1/4 cents, or 1.1%, to $4.86 3/4.

 

Gold prices jumped on Friday, following the Federal Reserve’s decision to hold interest rates steady, as the U.S. central bank’s concern about soft global economic growth burnished the case for safe-haven precious metals.

 

Gold prices, which have lost more than 7% in the past year and have been bumping along five-year lows, on Friday touched their highest level in more than two weeks, gaining $20.80 or 1.9% to settle at $1,137.80 a troy ounce on the Comex division of the New York Mercantile Exchange.

Prices for crude oil slid 4.5% on Friday.