Commodities : Cattle Futures Prices Drop

Cattle futures prices declined sharply Wednesday on the Chicago Mercantile Exchange, and analysts put part of the blame on a report of pesticides in food, including beef.

On other markets, wheat was higher while corn and soybeans declined, precious metals were sharply lower and energy futures declined.

“Cattle got pressed by the (pesticide) study,” said Tom O’Hare, an analyst in New York with the investment firm Smith Barney, Harris Upham & Co.

While the report did not focus on how contaminated food is, but what the potential for contamination is, a superficial reading could give the impression that “tomatoes and beef and pork and everything we eat is poisonous,” said O’Hare.

The report was prepared by a committee of the National Academy of Sciences.

Also weighing on the market, O’Hare said, was heavy selling by investment funds that wanted to offset earlier buys before first notice day Thursday for the June contract.

“And there’s a smell of weakness in beef,” said O’Hare. “Buying (by retailers) for the holidays is pretty much done.”