Chicago Mercantile Exchange (CME) feeder cattle futures closed down their daily limit on Thursday on concerns among market participants about consumer demand ahead of the US Memorial Day holiday, Reuters reported, citing analysts.
Traders also assessed the possibility that a US Department of Agriculture monthly report on Friday would show more cattle placed into feedlots in April than a year earlier.
Strong consumer demand helped push US beef prices to record highs this year, while the nation's cattle herd contracted to its smallest in 75 years.
Cattle inventories have dwindled due to a years-long drought that burned up grazing lands as well as a US ban on imports of Mexican livestock, intended to keep out the New World screwworm parasite.
"On the demand side, we're going into a three-day weekend with high prices on energy and beef," leaving market players uncertain of how consumers would react to the costs of both at the start of the traditional US grilling season, said Don Roose, president of US Commodities.
He added that recent statements from the Trump administration about potential actions to ease beef shortages are also pressuring futures, with traders fearing growing supplies alongside diminishing demand.
Mexico aims to double beef exports to the United States next year, its main meat industry group said.
A Reuters poll of analysts expects the USDA to report on Friday that placements into feedlots last month were up 3.4% from a year earlier. They estimate the US had 1.6% more cattle in feedlots as of May 1 than a year earlier.
Analysts said a resurgence of drought across the Plains has recently encouraged producers to send more cattle to feedlots.
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