CHICAGO – U.S. live cattle futures sank to multi-month lows on Friday as investors continued to digest Thursday's news that Cargill Inc. plans to close a Texas beef packing plant on Feb. 1, traders and analysts said.
Cargill announced that the Plainview, Texas plant would be shut down due to tight cattle supplies after drought in the U.S. southwest reduced the cattle herd to its lowest in 60 years.
Chicago Mercantile Exchange live cattle selling was likely based on the belief that the closure would result in a surplus of cattle until the industry can adjust to the loss of that plant, Citigroup futures specialist Art Liming said. At times, investors bought futures on breaks given already tight cattle numbers that could support prices for slaughter cattle moving forward, he said.
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