Chicago Mercantile Exchange (CME) cattle futures closed lower on Thursday as traders sought profits ahead of the holiday weekend, and adjusted positions in anticipation of any seasonal dips in steak demand after Father's Day, Reuters reported, citing market analysts.
Cash cattle markets have cooled slightly in recent days, as some packers have been unwilling to continue to pay high premiums for cattle — even as supplies are tight — as their margins have been deeply in the red for weeks, said Karl Setzer, partner at Consus Ag Marketing.
The market also is seeing some adjustments in basis, where the gap in prices between lower-priced futures and higher-priced cash markets is beginning to tighten, said Don Roose, president of Iowa-based US Commodities.
Now, as grilling season is well underway, "the trade is concerned that we'll start to see some seasonal demand slide for beef," Roose said.
On Thursday, after market trading ended, the US Department of Agriculture reported that the country had 2% more cattle in feedlots as of June 1 than a year earlier — slightly below analysts' expectations of a 2.5% increase.
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