Commodities : Cattle Futures Take a Tumble

Cattle futures prices fell sharply Wednesday on the Chicago Mercantile Exchange amid fears that abundant supplies would translate into sluggish cash sales for the rest of October.

Pork futures ended mostly higher.

On other markets, soybeans made strong gains while the grains also advanced, energy futures recovered from Tuesday’s losses and firmed, and precious metals settled slightly higher.

Cattle futures opened lower and tumbled at midday after marketing reports indicated weak wholesale demand, analysts said.

“There were fears that wholesale beef demand would remain sluggish, and concern that we’re just not moving enough cattle,” said Philip Stanley, an analyst in Chicago for Thomson McKinnon Securities.

Stanley said traders believed that wholesale beef sales would remain slow for the rest of the month.

Chuck Levitt, an analyst in Chicago for Shearson Lehman Bros., said that the abundant supplies of beef, pork and poultry was bad news for the beef industry.

“We’re giving the retailers lots of choices as far as what they want to promote and feature, and it’s starting to take its toll on the highest priced meat--the beef,” Levitt said.

Compounding the problem was the growing number of market-ready animals being over-fattened on feedlots, Levitt said, noting that consumers prefer lean beef.

Live cattle futures for the nearby October delivery hit a low of 66.27 cents a pound, 1.08 cents below Tuesday’s close. But the market recovered slightly on rumors of higher packer prices, Stanley said.

Pork futures advanced as some traders sold cattle and bought hogs and frozen pork bellies, Stanley said.

Live cattle settled 0.55 cent to 0.80 cent lower with the contract for delivery in October at 66.62 cents a pound; feeder cattle were 0.48 cent to 0.82 cent lower with October at 76.67 cents a pound; live hogs were 0.25 cent lower to 0.42 cent higher with October at 50 cents a pound; frozen pork bellies were 0.13 cent to 0.43 cent higher with February at 60.05 cents a pound.

Soybean futures settled up as much as 6.25 cents a bushel on the Chicago Board of Trade while most grain futures advanced slightly.

The soy complex was led by buying in the soybean oil pit on rumors that India was nearing a deal to buy more U.S. edible oils, said Rich Feltes, an analyst in Chicago for Refco Inc.

Wheat and corn futures traded within narrow margins throughout the session and ended little changed from Tuesday’s settlement prices.