Weak Cash Markets Pressure Livestock Futures
December 11 2017 - 4:03PM
Dow Jones News
By Benjamin Parkin
Livestock futures fell on lingering weakness in cash
markets.
December lean hog contracts slid 0.1% to 63.6 a pound at the
Chicago Mercantile Exchange, with the more-active February hog
contract falling 2.7%.
Market observers said that cash prices for physical hogs were
due to start the week steady to lower, likely extending recent
losses.
Oversupply of slaughter-ready hogs has weighed on prices,
allowing meatpackers to lower bids in the cash market despite
slaughtering large numbers of hogs. Packers slaughtered 2.537
million head last week, a new high since two new facilities opened
in September.
A seasonal demand boost has helped steady pork prices, analysts
say, but that could soon wane as retailers fill their shelves ahead
of December holidays. Wholesale pork prices rose 5 cents to $83.75
per 100 pounds as of midday Monday, after rising by 35 cents over
the course of last week.
Cattle futures also fell. CME December-dated live cattle
contracts dropped 0.4% to $1.15175 a pound.
Cash prices last week averaged $3 below a week earlier, with
growing supplies of fattened, slaughter-ready cattle also eroding
prices. Meatpackers paid an average of $117.45 per 100 pounds on a
live basis and $187.02 dressed.
Analysts said pressure on cash cattle prices and futures would
likely extend into this week, with funds souring on the market. The
Commodity Futures Trading Commission last week said that money
managers trimmed their bets that live cattle prices would rise,
though they still held a net long of 117,010 futures and options as
of last Tuesday.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
December 11, 2017 15:48 ET (20:48 GMT)
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