Livestock Prices Off Sharply

Livestock and meat prices fell sharply Friday on the Chicago Mercantile Exchange as abundant supplies of meat continued to pressure the market.

Pork bellies for delivery in the next few months fell by the 2-cent limit allowed by the exchange and cattle for delivery in June fell to a life-of-contract low.

The burdensome supply could continue to pressure cattle prices, said Phil Stanley, a livestock analyst in Chicago with Thomsom McKinnon Securities. Stanley noted that the current futures price is about 2 cents over current cash quotes.

“This could be the start of a real bloodbath,” Stanley said.

Traders already have announced intentions to deliver cattle against nearly 2,000 futures contracts, an unusually high number, which has prompted concern that cattle will have time to put on extra weight.

Weakness in the pork sector also spilled into the cattle pit, analysts said.

Stanley noted that technical factors such as trends on price charts also encouraged selling in the pork complex.

Wholesale pork supplies also are plentiful, Stanley said.