Cattle Futures Mixed; Supply Pressures Mount
December 18 2017 - 3:54PM
Dow Jones News
By Benjamin Parkin
Cattle futures started the week mixed as a cash-market rally
lent some support to prices.
Physical cattle prices rose unexpectedly on Friday, with
meatpackers around the country paying between $118 and $120.50 per
100 pounds on a live basis, above the prior week's level and
defying expectations for a decline. Sales over the course of the
week averaged at $119.66 live and $188.96 dressed.
That prompted futures traders to push the front-month December
contract up to similar levels when markets reopened on Monday. The
contract closed 0.9% higher at $1.19975 a pound at the Chicago
Mercantile Exchange, the highest in over two weeks.
Contracts for later months fell, however, as analysts cautioned
that the cash-market boost was insufficient to stave off
longer-term supply pressure. Most-active CME February futures fell
0.4% to $1.206 a pound.
Beef production is expected at a record next year, while a
stream of government reports have shown increasing numbers of
cattle being fattened for slaughter in the first half of 2018. The
U.S. Department of Agriculture is due to release updated figures
later this week.
Analysts said they expected renewed pressure on the cash market
this week as packers wind down slaughter operations and demand for
beef eases. Retailers have already secured their supplies of beef
for the holidays, they said.
Wholesale beef prices rose $1.36 to $203.23 per 100 pounds at
midday Monday, adding to gains from Friday.
Hog futures fell. The front-month February contract slid 1.6% to
67.4 cents a pound, while later months were also lower.
Market observers said that cash-market prices for hogs were
expected to continue trending lower early this week.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
December 18, 2017 15:39 ET (20:39 GMT)
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