Commodities for Friday, May 3, 1985 : Cattle Futures Lead Sell-Off
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Cattle futures led a broad sell-off in livestock and meat prices Friday on the Chicago Mercantile Exchange as heavy animals continued to burden an already oversupplied market.
Tom Morgan, a livestock analyst in Chicago with Heinold Commodities, said meatpackers are cutting the price they pay for the heaviest of the cattle being marketed, a development that reflects a backlog of animals. He added that many meatpackers aren’t set up to handle overweight animals.
“We’re having a fire sale right now on those,” he said.
“We are getting the problem cleaned up. The question is: ‘How low do we have to go?’ ”
Prices of live cattle and feeder cattle fell to life-of-contract lows across the board, as live cattle contracts for delivery in June, August and October fell 1.5 cents a pound, the maximum allowed by the exchange in a single day’s trading.
The price of cattle in the Texas Panhandle, a major marketing area, has fallen 15% since it peaked last December at 69 cents a pound.
Hog and pork belly prices were pressured in sympathy with cattle prices, Morgan said, as cash prices for live animals and pork cuts on wholesale markets were steady.
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