Cattle Futures Rally on Cash Strength
December 15 2017 - 3:51PM
Dow Jones News
By Benjamin Parkin
Cattle futures ended the week with a bounce on
higher-than-expected physical cattle prices.
December-dated live cattle contracts rose 2.3% to $1.189 a pound
at the Chicago Mercantile Exchange, the highest close this month.
Contracts for feeder cattle, which need to be fattened before
slaughter, also rose.
The late surge came as meatpackers unexpectedly paid more for
physical cattle on the cash market than a week earlier. The U.S.
Department of Agriculture said that cattle traded for $118 per 100
pounds on a live basis in Kansas and $188 on a dressed basis in
Nebraska, though the volume of sales was low. Market observers said
cattle also traded in Iowa at those levels.
Cash prices last week averaged $117.50 live and $187 dressed
nationally, and analysts had expected prices to fall further this
week as packers eased off buying. But packers may have needed more
livestock than expected, they said, helping to halt further
losses.
Troy Vetterkind, owner of Vetterkind Cattle Brokerage, said
earlier Friday that higher futures prices were unlikely to hold
during the holiday period. Beef demand has recently been
underwhelming, with wholesale prices falling every day this week
before turning higher at midday Friday.
"I still believe we have further downside risk in the market,"
he said.
Hog futures also rose. CME December lean hog contracts rose 1.3%
to 68.525 cents a pound, with the late rally in the cattle market
helping to carry prices higher.
Wholesale pork prices rose 21 cents to $77.52 per 100 pounds as
of midday Friday, adding to modest gains from Thursday. Cash hog
prices have fallen every day this week, however.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
December 15, 2017 15:36 ET (20:36 GMT)
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