Live cattle futures on the Chicago Mercantile Exchange (CME) closed mixed on Tuesday, pausing after a steep sell-off tied to US government efforts to lower beef prices, while feeder cattle futures continued to slide, Reuters reported, citing analysts.
CME December live cattle closed down 0.600 cent at 226.775 cents per pound but stayed above a near-three-month low set on Monday. February live cattle finished 0.100 cent higher at 224.100 cents.
November feeder cattle futures declined for a fifth straight session, settling down 5.050 cents at 333.400 cents per pound after hitting their lowest price since August 4.
Traders remained fixated on recent steps taken by the administration of US President Donald Trump to bring down historically high beef prices, including a plan to quadruple low-tariff imports of Argentine beef.
Analysts are skeptical that Argentina could supply significant amounts of beef to the US market but the administration's moves nonetheless rattled the market.
"It's the fact that this has all gotten the White House's attention ... It seems like more will be done," said Ted Seifried, chief market strategist for Zaner Ag Hedge.
Beef prices have surged as the US cattle herd has shrunk to its smallest size in decades following a years-long drought that burned up pasture lands.
Managed funds have maintained a net long position in the cattle markets, analysts said, while the flurry of recent headlines over beef prices appeared to have spurred some to liquidate. Open interest in CME live cattle futures fell during Monday's sell-off by about 8,200 contracts, exchange data showed, a likely sign of long liquidation.
Fears that the US border could be reopened to Mexican cattle continued to pressure feeder cattle futures, brokers said. Since May, Washington has mostly blocked imports of Mexican cattle to keep out a flesh-eating parasite called New World screwworm.
But Mexico's agriculture minister is expected to travel to Washington this week with the aim of reaching an agreement on reopening the border for cattle.
"I personally don't think it's smart to reopen the border. But you do get the feeling that if the administration is very concerned, maybe that will happen," Seifried said.
Expanded daily trading limits will remain in effect for cattle futures during Wednesday's trade, the CME said.
In the hog market, CME December lean hog futures settled down 0.675 cent at 80.825 cents per pound and February finished down 0.950 cent at 82.450 cents.
The USDA priced pork carcasses at $100.02 per hundredweight on Tuesday afternoon, down $1.06 from Monday.
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