Chicago Mercantile Exchange (CME) cattle futures witnessed a notable downturn to multi-month lows, attributed to technical selling, fund liquidation, and concerns over demand dynamics. The lingering impact of bird flu outbreaks in dairy herds has contributed to market jitters, with the spread of the virus raising uncertainties about its potential effect on both beef and dairy product demand, despite no detections in beef cattle.
The U.S. Department of Agriculture’s confirmation of cases in dairy cattle across multiple states has fueled concerns about the threat to demand for beef and dairy products, given their common origin from cattle. This headline risk has significantly impacted market sentiment, with the unknown implications of the outbreak adding to the prevailing challenges facing the cattle markets.
In addition to the bird flu concerns, stubbornly high U.S. inflation has also raised apprehensions about potential impacts on beef demand due to elevated prices, contributing to the overall market unease and downward pressure on cattle futures.
The impact of these factors was evident in the performance of CME June live cattle, which ended down 2.425 cents at 171.475, hitting the lowest price since January 9. The contract experienced a 0.3% decline for the week, marking its fourth consecutive weekly downturn. Similarly, CME May feeder cattle also faced a substantial decline, ending down 3.95 cents at 234.2 and hitting its lowest price since December 26, with a 1.7% slide for the week, reflecting its seventh straight weekly loss.
Lean hog futures also experienced weakness, retreating from contract highs earlier in the week. CME June lean hogs tumbled 3.725 cents at 102.075 cents per pound, hitting the lowest price since April 1 and marking a 5.4% decline for the week, reflecting the broader challenges facing the livestock futures market.