By Benjamin Parkin

Cattle futures tumbled from multimonth highs, while meatpackers negotiated lower prices with feedyard operators for slaughter-ready animals.

The cash trade for physical cattle rose sharply last week. Meatpackers paid an average of $130 per 100 pounds, up $4 from the previous week. The futures market also rose, as traders looked to tighter short-term supplies of slaughter-ready cattle.

But futures tumbled on Wednesday, which analysts attributed partly to traders reading chart signals as a suggestion that prices were a little overheated. Packers and feedyards followed suit, trading cattle at $128 in southern states like Texas, Kansas and Oklahoma, according to the U.S. Department of Agriculture.

February live cattle contracts fell 0.5% to $1.2965 a pound at the Chicago Mercantile Exchange, briefly shooting lower on Wednesday morning before recouping most of those losses.

Lower futures came despite a red-hot wholesale beef market, which has risen sharply in recent days. Analysts said packers have pushed beef prices higher in order to offset the rise in cash prices.

Wholesale beef rose almost $2 to $217.85 per 100 pounds on Wednesday morning, according to the USDA, adding to gains of over $6 so far this week.

Hog futures rose, bouncing from recent lows. Cash prices have fallen every day for over two weeks. CME April lean hog contracts rose 1% to 69.9 cents a pound.

A plant closure briefly disrupted hog slaughter activity this week, analysts said.

Meat processor Tyson Foods Inc. said Wednesday it reopened a pork processing plant in Logansport, Ind., which closed earlier this week after an insect infestation.

The plant closed when unsanitary conditions prompted USDA food-safety inspectors on Monday to stop the company selling meat produced at the plant, the agency said.

The decision came after some cockroach sightings, according to a person familiar with the matter. Tyson said the plant closed temporarily due to a production issue, which had been resolved, and declined to disclose more detail.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

February 21, 2018 15:41 ET (20:41 GMT)

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