990346 Cattle Tumble On Beef Output Forecast

Chicago - Cattle prices fell sharply at the Chicago Mercantile Exchange after the U.S. government increased its estimate of 1999 beef production.

Oil prices slipped as the market awaited news of possible production cuts from an oil producers' meeting in the Netherlands. Cocoa prices recovered to close with small gains after sliding to a 4-1/2-year low as leading producer Ivory Coast continued to move product to ports for export.

The U.S. Agriculture Department Thursday estimated 1999 beef production at 25.406 billion pounds (11.4 billion kg), up from its estimate of 25.081 billion pounds (11.3 billion kg) a month ago. This was bad news for cattle producers who had hoped for lower production. In 1998, beef production was 25.760 billion pounds (11.6 billion kg).

“Livestock prices remain under pressure from large meat supplies,” the department said. “With larger forecast beef production, cattle prices are expected to recover less rapidly than forecast last month.”

Cattle producers and industry analysts have been expecting higher cattle prices this year after a disastrous 1998. Last year, many cattle producers lost up to $150 per head as abundant beef and pork supplies sent cattle prices sharply lower.

Cattle for delivery in April ended 1.1 cents a pound lower at 67.400 cents.

Crude oil futures at the New York Mercantile Exchange ended lower as a nervous market waited while oil producers met in The Hague. The meeting of ministers from OPEC members Saudi Arabia, Iran, Venezuela and Algeria and non- member Mexico is set to resume Friday.

Members of the Organization of Petroleum Exporting Countries plan to meet in Vienna on March 23 to discuss remedies for the worldwide oil glut. A few OPEC ministers have hinted recently that the organization would seek production cuts to shore up prices, which had fallen to 12-year lows in recent months.

Major Gulf Arab oil exporters are proposing a total reduction in output by OPEC and non-OPEC members of about 2.3 million barrels per day, a delegate to the talks in the Dutch capital said Thursday.

Crude oil for April delivery ended at $14.31 a barrel, down 38 cents. April heating oil closed at 37.89 cents a gallon, down 0.77 cent, and April gasoline was down 0.50 cent at 44.30 cents a gallon.

Cocoa futures at New York's Coffee, Sugar and Cocoa Exchange ended slightly higher as weakness in the dollar made U.S. cocoa attractive to foreign buyers.

The U.S. dollar slipped against both the British pound and the euro late Thursday, as the euro leaped higher following the resignation of German Finance Minister Oskar Lafontaine.

A weaker dollar usually supports prices in the New York market, as buyers seek cheaper dollar-denominated cocoa.

Cocoa slipped early in reaction to a slight increase in stocks of exportable cocoa from Ivory Coast, the world's top producer. As of March 8, Ivory Coast had moved 921,000 metric tons of cocoa into export channels since October versus 916,000 tons a year ago, industry sources said.

Cocoa for May delivery rose $5 to $1,215 a metric ton, after slipping to a life-of-contract low of $1,191, the lowest level in 4-1/2 years.

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