Live cattle futures on the Chicago Mercantile Exchange (CME) closed lower on Wednesday, with the benchmark June contract retreating from its highest in nearly two weeks as wholesale beef prices declined, Reuters reported, citing traders.
Setbacks on Wall Street equity markets added to bearish sentiment, fueling worries about consumer demand for high-priced cuts of beef.
CME June live cattle settled down 0.400 cent at 175.325 cents per pound, turning lower after a climb to 176.100 cents, its highest since April 4. CME May feeder cattle futures ended down 0.700 cent at 240.275 cents per pound.
The US Department of Agriculture (USDA) priced choice cuts of boxed beef at $296.78 per hundredweight (cwt), down $1.24 from Tuesday. Choice cuts had been priced above $300 per cwt, or $3 per pound, throughout the month of March, but have struggled to stay above that level this month.
"The stock market is wobbly today, and with the weakness in the boxed beef, that probably spurred some light selling in the cattle," said Dan Norcini, an independent livestock trader.
Demand for beef tends to pick up seasonally around this time of year, Norcini noted, as retailers stock meat cases ahead of the Mothers' Day and Memorial Day holidays, followed by the start of the summertime grilling season.
"Everybody is waiting for that to kick in. The boxed beef falling below the $3 mark; that has got some people concerned that the demand is not quite ready to pick up yet," Norcini said.
Ahead of the USDA's monthly Cattle on Feed report due Friday, analysts surveyed by Reuters on average expected the government to report the number of cattle placed into US feedlots during March at 1.853 million head, down 7% from a year earlier.
CME lean hog futures ended narrowly mixed, awaiting fresh direction. The most-active June contract settled down 0.100 cent at 102.725 cents per pound but stayed inside of Tuesday's trading range.
The USDA priced the pork carcass cutout late Wednesday at $99.55 per cwt, unchanged from Tuesday.
Traders await the USDA's export sales report on Thursday for a gauge of weekly sales of US pork and beef.
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