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CME live cattle futures declined as large domestic supplies weighed on prices after a fire at a Tyson Foods slaughterhouse in Kansas temporarily removed a major buyer of livestock. The USDA opened an investigation into whether unfair practices explain the wide gap between cattle and beef prices.
Reduced packer capacity has shifted cattle to other plants and pressured cash cattle, which weighs on feeder cattle demand and futures values while the USDA probe adds uncertainty to packer pricing.
advancedeconomicsolutions.comAug 30, 2019After 29 past bearish logistics events, Live Cattle moved a median -0.3% over 5 sessions (38% higher; middle half -2.0% to +0.5%), and -3.7% over 20.
After 20 past bearish logistics events, Feeder Cattle moved a median +1.3% over 5 sessions (60% higher; middle half -0.7% to +2.0%), and +2.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
CME live cattle futures fell as ample cattle supplies met reduced packer demand after the Tyson fire, and the USDA probe added uncertainty, which is the mechanism for the late-August weakness.
CME cattle futures declined on large supplies, the lost Tyson buyer and the USDA probe, which is directly in the move window and pressured feeder cattle.
Futures declined on large supplies and a removed buyer after the fire, plus the USDA probe, a negative sentiment backdrop heading into the Sept 3 drop.
