COMMODITIES : Cattle Futures Lower After Break in Talks With Japan

A breakdown in talks between the United States and Japan over Japanese restrictions on imports of beef and oranges helped drive live cattle futures prices lower Wednesday.

Analysts said the Agriculture Department’s downward revision of its March cattle slaughter estimate would likely become a negative factor in today’s trading on the Chicago Mercantile Exchange.

On other exchanges Wednesday, grain futures advanced while soybeans retreated, precious metals were higher, energy futures were lower and stock index futures fell.

U.S. Trade Representative Clayton K. Yeutter announced in Washington that the United States, with Japan’s approval, had asked an international trade panel to settle the beef and citrus dispute. It was the second collapse in the negotiations since late March, when a four-year agreement on Japanese beef and citrus import quotas expired.

“The cattle market . . . came under pressure during the day as it appeared there would not be an agreement reached between Japan and the United States,� said Charlie Richardson, a livestock analyst in Denver with Lind-Waldock & Co.

Slaughter Overestimated

Despite the market activity, Richardson said beef trade with Japan accounts for a very small share of the U.S. cattle market.

Meanwhile, the USDA said Wednesday afternoon that it had overestimated the number of cattle slaughtered in March by 44,000 head and revised that number accordingly.

Richardson said the revision was “nothing but bearish on the cattle futures.�

The correction should help clear up industry concerns over discrepancies between USDA daily estimated slaughter totals and the weekly actual figures.

Feeder cattle futures finished mixed while pork futures advanced on ideas that hog slaughters have passed a seasonal peak, Richardson said.

Live cattle settled 0.53 cent lower to 0.03 cent higher, with the contract for delivery in June at 71.60 cents a pound; feeder cattle were 0.10 cent lower to 0.40 cent higher, with May at 79.55 cents a pound; hogs were 0.17 cent to 0.95 cent higher, with June at 50.45 cents a pound, and frozen pork bellies were 0.22 cent lower to 0.23 cent higher, with May at 51.17 cents a pound.

Conditions Favor Planting

Grain futures settled mostly higher on the Chicago Board of Trade while soybeans posted modest losses.

Activity in both soybeans and corn, which showed only the slightest improvement, was primarily influenced by forecasts for favorable planting and growing weather, analysts said.

Longer-range forecasts indicated conditions also would favor soybean planting when it begins in earnest next week.

Energy futures declined in response to an American Petroleum Institute report showing larger-than-expected domestic inventories of gasoline and crude, analysts said.

West Texas Intermediate crude oil settled 17 cents lower to 5 cents higher, with June at $17.20 a barrel; heating oil was 0.28 cent to 0.57 cent lower, with June at 46.20 cents a gallon, and unleaded gasoline was 0.15 cent to 0.56 cent lower, with June at 49.72 cents a gallon.

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