Hog Futures Rise on Higher Pork Prices
September 19 2017 - 3:40PM
Dow Jones News
By Benjamin Parkin
Hog futures rose Tuesday after pork prices were higher for the
first time in almost two weeks.
Wholesale pork prices ended Monday up 33 cents to $78.09 per 100
pounds, halting eight consecutive trading days of decline. That
encouraged traders to unwind negative bets on Chicago Mercantile
Exchange lean hog futures, said Rich Nelson, chief strategist at
brokerage Allendale Inc., particularly in the deferred December
contract.
CME October lean hog futures rose 0.2% to 60.125 cents a pound,
while December futures rose 2.9% to 59.725 cents.
Concerns about oversupply continue to pressure the market,
however. Wholesale pork prices resumed their slump on Tuesday, with
prices lower again in the morning. Cash hog prices, meanwhile, were
expected lower after falling for over two consecutive weeks.
Two packing houses that opened in September are expected to
bolster longer-term hog prices as meatpackers compete for supplies
given the added capacity. But they could end up further depressing
the market if farmers end up raising larger herds, Mr. Nelson
said.
"My concern is that our overall retail pork prices will continue
to fall," he said.
Cattle futures also rose. CME October live cattle futures
climbed 0.4% to $1.07975 a pound.
Wholesale beef prices also rose on Monday, while average cash
cattle prices last week were higher than a week earlier. Tighter
showlists of slaughter-ready cattle have sparked bets in the
futures market that meatpackers will need to pay steady-to-higher
cash prices again this week to secure supply.
Feeder cattle futures for September, meanwhile, rose 0.5% to
$1.51575 a pound, the highest close in a little under two months.
Traders are betting that the rate of cattle placed in feedlots for
fattening is slowing, allowing the number of slaughter-ready cattle
to ease in the coming months.
Analysts surveyed by The Wall Street Journal expect the U.S.
Department of Agriculture to show cattle placements in August
falling to 97% of year-ago levels. The rate of cattle marketed, or
sent to slaughterhouses, is expected at 106% compared with a year
earlier. Analysts expect the agency to put the total number of
cattle on-feed as of Sept. 1 at 103% of the 2016 figure.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
September 19, 2017 15:25 ET (19:25 GMT)
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