Slipping demand for beef in the U.S. and speculation about how China will curb inflation has lowered cattle futures from a 26-month high, Bloomberg reports.
Marking its first price decrease in five sessions, wholesale choice beef sank to $1.5864 a pound on Thursday, according to the U.S. Agriculture Department. Having ordered its banks to preserve larger reserves, China appears to be pushing its banks to soak up more liquidity in an effort to drain the system of cash and lower prices.
"Boxed beef looks a little softer to close out the week, so there isn't enough strength there to justify higher cash- cattle prices," Chad Henderson, a market analyst at Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, told Bloomberg.
The Thomson/Reuters CRB Index, which measures the prices of 19 key commodities, declined as much as 1.3 percent in trading today.
Henderson also said China's efforts to "keep things in check" also is playing a significant role in "pressuring all commodities."
China could also raise interest and deposit rates a quarter point as a method of encouraging international investment.
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