Cattle Fall as Demand May Shrink Before Thanksgiving; Hogs Drop

By Whitney McFerron

Nov. 17 (Bloomberg) -- Cattle fell to the lowest price this month on speculation U.S. consumers are buying less beef prior to the Thanksgiving holiday. Hog futures also dropped.

U.S. meatpackers sold 20.1 million pounds of beef last week, the least since the week ended Oct. 17, according to Department of Agriculture data. U.S. consumers tend to cut back on beef purchases in November as retailers step up marketing of turkey for Thanksgiving, said Dick Quiter, an account executive at FuturesOne. The holiday falls on Nov. 27 this year.

``Volume is light,'' Quiter said in a telephone interview from Chicago. ``Domestic demand certainly should be a little lighter going into the Thanksgiving holiday, and that's setting enough of a negative tone.''

Cattle futures for February delivery fell 1.65 cents, or 1.8 percent, to 89.025 cents a pound on the Chicago Mercantile Exchange. Earlier, the price touched 88.5 cents, the lowest for a most-active contract since Oct. 28. Futures have dropped 4 percent this month.

Feeder-cattle futures for January delivery declined 1.375 cents, or 1.4 percent, to 93.9 cents a pound in Chicago. Earlier, the price touched 92.95 cents, the lowest for a most-active contract since Oct. 27. Futures have slipped 4.2 percent this month.

Meatpackers sold 501.9 truckloads of choice beef last week, according to USDA data. Each load weighs 40,000 pounds (18,140 kilograms).

Higher Beef Prices

Wholesale beef rose 0.69 cent, or 0.4 percent, to $1.5771 a pound at midday today, the highest price since Sept. 25, USDA data show. On Nov. 14, the price fell 0.35 cent, the first drop since Oct. 29. Beef has gained 11 percent this month.

Cattle futures also fell amid speculation a global economic slump will prompt consumers to buy less beef, said Christian Mayer, a market adviser at Northstar Commodity Investments LLC in Minneapolis. The Standard & Poor's 500 Index declined as much as 2.8 percent today and was down 9.9 percent this month through Nov. 14.

``If people don't have money, they won't be buying steaks,'' Mayer said.

In another livestock market, hog futures for February settlement fell for a second session, declining 0.525 cent, or 0.8 percent, to 62.05 cents a pound in Chicago. Futures gained 8.1 percent this year before today.

Wholesale pork fell 0.55 cent, or 1 percent, to 56.41 cents a pound on Nov. 14, according to the USDA. The price is down 9.3 percent this month.

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.