Livestock Gains as Hogs Look Toward Lower Production
April 25 2017 - 4:10PM
Dow Jones News
By Julie Wernau
Livestock futures closed higher on ideas of strong demand for
meat spurred by a report Monday after the close that shows a
larger-than-expected drawdown in meat in cold storage.
In the hogs market, traders pushed up futures prices in
anticipation that a seasonal low for pork production could be in
the offing. Typically, slaughter rates drop in the summer and hog
prices can move about $15 higher per 100 pounds, said Don Roose,
president of U.S. Commodities Inc.
But so far the slaughter for hogs has been breaking records and
the U.S. Department of Agriculture is estimating an addition 5%
increase in production number this year. Bullish traders in hogs
are counting on recently strong exports of pork products to China
to boost prices. Import data from China showed a 12.4% increase in
March over the prior month and a 8.1% increase year-over-year for
pork products.
A monthly report of meat stored in U.S. cold storage warehouses
also gave the bulls a reason to run, with pork stocks down 10%
year-over-year to 555.1 million pounds.
"We're getting seasonal buying, people are watching some of
these demand numbers from the cold storage reports and China. The
question is what happens with the slaughter," said Mr. Roose
Cash bids for hogs remained steady to lower, with the USDA
estimate of this week's kill to date at 881,000 versus 854,000 for
the same period last year.
CME lean hogs for May were up 1.3% at the close at 65.225 cents
a pound.
Live cattle also rose on demand ideas, up 0.6% in the April
contract at $1.29825 a pound, with the cold storage report showing
464.5 million pounds of beef in U.S. freezers, down 3.6% over the
same time last year and the largest March drawdown in stocks in 14
years, according to Vetterkind Cattle Brokerage.
Short-term sales were light in the cash cattle market, with
yesterday's news of steers selling at $125 to $129 live for cattle
based off the June contract for delivery nearly a month out.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
April 25, 2017 15:55 ET (19:55 GMT)
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