24 October 2024

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) cattle futures turned lower on Wednesday, amid a flurry of technical selling and uncertainty whether consumer demand for beef would chill after an E. coli outbreak was linked to McDonald's Quarter Pounder burgers, Reuters reported, citing traders.

The outbreak has sickened 49 people in the US, with 10 hospitalised due to serious complications and one dead, according to the US Centers for Disease Control and Prevention.

December live cattle ended down 0.25 cent at 187.875 cents per pound, while November feeder cattle futures settled down 1.700 cents at 247.225 cents per pound.

Meanwhile, CME December lean hog futures rose 1.05 cents to finish at 80.175 cents per pound, on a round of technical buying as wholesale prices have been staying unseasonably high, analysts said.

While cattle futures started the day sharply down, much of Wednesday's choppy trade was due to technical selling and position adjusting, said Austin Schroeder, analyst with Brugler Marketing & Management.

Wholesale beef prices were mixed, with the choice boxed beef cutout falling $2.55 to $321.41 per hundredweight, the USDA reported Wednesday afternoon. Select boxed beef prices rose $0.97 cent to $295.77 per cwt.

"We're approaching the summer highs in some of these live cattle contracts," Schroeder said. "From a technical standpoint you might be seeing a little bit of a correction."

But news of the E. coli outbreak did add uncertainty to the market, analysts said. The USDA said on Wednesday it was still working to determine the safety of ground beef used by McDonald's, but that the likely cause of the outbreak was slivered onions.

"There could be some potential for demand to be diverted away from beef," Schroeder said.

On the other hand, Schroeder said, consumers might simply switch away from McDonald's. Previous E. coli outbreaks at big US fast-food chains have caused consumers to shun those chains for months.