U.S. cattle futures dropped 2.5 percent on Thursday to a two-week low on worries that hot weather over much of the country will hurt beef sales as consumers switch to lighter fare such as salads, traders said.
Hog futures finished lower as heat may hurt pork sales too.
Fund and technical selling developed after the August and October cattle dropped under their respective 100-day moving averages.
"You have a combination of very over-bought conditions and we are going to a weak time period for the cash," said Joe Ocrant, president of Oak Investment Group, said of the selling in cattle. "We have 10 days of scorching weather coming up so that is going to put a crimp on demand."
Forecasts call for more than a week of temperatures in the 90s Fahrenheit, said Mike Palmerino, meteorologist with Televant DTN.
"The hot weather will encompass most of the eastern two-thirds of the country essentially for the entire week," said Palmerino,
USDA reported cash beef prices were higher at midday, but some Chicago traders said those prices are due to drop if the hot weather develops.
The heat also was blamed for lower cash cattle sales on Thursday. Feedlots from Kansas to Texas sold cattle at $3.50 to $4 lower prices of $111 per cwt because they were being stressed by 100-degree weather, traders said.
"I think some of the feedlots are just selling them because they know they are not going to do very well," said Ocrant.
August cattle futures 2LCQ1 closed down 2.85 cents, or 2.51 percent, at 110.55 cents per lb and October 2LCV1 closed down 2.700 cents , or 2.25 percent, at 117.200.
Feeder cattle were hit hard as the hot weather has had ranchers rushing to sell cattle because the heat and drought have damaged pastures.
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