Cattle, Hog Futures Decline

Anticipation of negative news in government inventory reports to be released Monday pushed cattle futures prices mostly lower and dragged down hog prices Friday on the Chicago Mercantile Exchange.

The live cattle contract for delivery in August closed at a five-year low and was pressured by traders’ fears that one of the USDA reports will show an increased number of cattle on feedlots this year, said Chuck Levitt, a livestock analyst with Shearson Lehman Bros. in Chicago.

The probable increase is due to fewer cattle deaths on feedlots and sluggish movement of animals into the marketing pipeline, he said.

The expected disclosures exacerbated traders’ concerns over already plentiful supplies of cattle, Levitt said.

“The market is still having to wrestle with this abundant, cheap beef,” he said.

The hog market continued to feel spillover pressure from cattle. Frozen pork belly contracts for delivery in July and August dropped 2 cents, the limit allowed in a single day’s trading, Levitt said.