Cattle dropped for the fourth straight day, heading for the longest losing streak since July, on speculation that animal demand is going to fall after Cargill Inc. said it will idle a beef plant. Hogs were steady.
The beef-processing plant in Plainview, Texas, will stop operations at the close of business on Feb. 1 as the U.S. herd shrank and feed costs climbed, Minneapolis-based Cargill said yesterday in a statement.
“The initial reaction from the industry is always there’s less demand for fat cattle because this packer shut down, and therefore that’s bearish for prices,” David Kruse, a commodity trading advisor at Commstock Investments Inc. in Royal, Iowa, said in a telephone interview.
Cattle futures for April delivery fell 0.4 percent to $1.303 a pound at 9:52 a.m. on the Chicago Mercantile Exchange. Yesterday, futures tumbled by as much as the 3-cent exchange limit to $1.297, the lowest for the most-active contract since Nov. 16.
The plant closing will “ultimately be friendly to the market,” because it means less beef production, Kruse said.
Feeder-cattle futures for March settlement slid 0.3 percent to $1.45425 a pound on the CME. A close at that price would be the 10th straight drop, the longest consecutive decline since November 2004.
Hog futures for April settlement rose 0.2 percent to 88.275 cents a pound in Chicago.
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