Weak Cash Demand Sends Cattle Futures Lower
Undated (AP) _ Reports that several meat packers shut down slaughtering operations sent livestock and meat futures prices tumbling Monday on the Chicago Mercantile Exchange.
On other markets, coffee futures moved higher, wheat advanced while the other grains and soybeans were on the retreat, precious metals declined and energy futures were mostly lower.
Trading in livestock futures ″got ugly early in the day,″ said Phil Stanley, a consultant in Chicago with DEC Futures Inc., of Lincoln, Neb.
The beef packing operations have been losing money and news that some were shutting down took a strong hit on the markets.
Where futures go from here depends on whether packers are able to force cash prices lower, he said.
Boxed beef demand was sluggish last week even at lower prices.
″But I think the retailers are going to be back in the market in April,″ Stanley said, noting that a large trader was aggressively buying the April futures contract.
Pork futures declined, reflecting lower cash hog prices and the expectation that they will be lower again on Tuesday.
Live cattle futures settled .35 cent to 1.25 cents lower with the contract for delivery in April at 80.65 cents a pound; feeder cattle were .50 cent to .98 cent lower with March at 89.47 cents a pound; live hogs were .20 cent to .87 cent lower with April at 52.40 cents a pound; and frozen pork bellies were . 15 cent to .60 cent lower with May at 66.82 cents a pound.
Coffee futures were a little higher on continued buying from Friday’s volatile session, but the market was much more settled.
Traders are waiting to see what Brazil is going to do after having suspended coffee export registrations last Thursday while it reviews its position on quotas.
″The key now is when Brazil is going to resume registrations and how,″ said Celeste Georgakis, an analyst in New York with Cargill Investors Services Inc. ″We don’t know if they’re going to open all the months at once or do it one month at a time. This will affect the market.″
″Exporters in Brazil say we should get some idea about this in the next few days,″ she said.
Coffee futures on the Coffee, Sugar & Cocoa Exchange in New York settled .25 cent to .90 cent higher with the May contract at 93.40 cents a pound.
Poor export prospects sent the soybean complex into a decline on the Chicago Board of Trade.
The continued strength of the dollar, which undermines overseas demand, sent soybean futures to a 10-week low at the Chicago Board of Trade, said Dan Cekander, a grain analyst in Chicago with Rodman & Renshaw Inc.
The dollar rallied to a nine-month high against the German mark on Monday and was higher against all key currencies.
The expectation that bean prices could go lower also weighed on the corn market, already suffering from sluggish export demand.
Wheat, on the other hand, showed a bit of strength, attributed to concern for the hard red winter wheat crop because of dry conditions in the central and southern plains.
Wheat settled 3/4 cent to 2 cents higher with the May contract at $2.84 a bushel; corn was 3/4 cent to 2 1/4 cents lower with May at $2.53 a bushel; oats were 1/4 cent lower to 1/2 cent higher with May at $1.23 a bushel; and soybeans were 5 1/2 cents to 7 1/4 cents lower with May at $5.69 1/2 a bushel.
The strong dollar also pressured gold futures, said Stephen W. Platt, a precious metals analyst in Chicago with Dean Witter Reynolds Inc.
And while there was some scattered support for silver, the overall interest is low, he said.
Gold settled $4.10 to $4.60 lower on the Commodity Exchange in New York, with the April contract at $359.40 a troy ounce; and silver was 4 cents to 4.3 cents lower with March at $3.926 a troy ounce.
Energy futures were mostly lower on the New York Mercantile Exchange.
Light, sweet crude oil was 25 cents to 48 cents lower with May at $19.62 a barrel; heating oil was 1.35 cents to 1.79 cents lower with April at 56.46 cents a gallon; unleaded gasoline was .90 cent to 1.48 cents lower with April at 69.70 cents a gallon; and natural gas was 0.3 cent lower to 0.5 cent higher with May at $1.390 per 1,000 cubic foot.