Cattle Futures Ease Off Recent Highs; Cash Prices Fall
February 21 2018 - 3:56PM
Dow Jones News
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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