Cattle Futures Rise; Traders Look for Cash Strength
October 18 2017 - 3:47PM
Dow Jones News
By Benjamin Parkin
Cattle futures turned higher as the week's cash trade
started.
Meatpackers paid $109 per 100 pounds for 230 head of live Kansas
cattle at Wednesday morning's online Fed Cattle Exchange auction,
which helps establish price direction for the week.
That was slightly lower than last week's average price of $111.
Futures nevertheless rose after the auction, with some traders
wagering prices in the broader cash market would be steady this
week despite larger showlists of slaughter-ready cattle.
Rising wholesale beef prices and favorable processing margins
should give meatpackers flexibility to pay steady money on the cash
market. The HedgersEdge processing index was $99 a head on
Wednesday.
October live cattle futures rose 0.3% to $1.11475 a pound at the
Chicago Mercantile Exchange after falling earlier this week.
Traders are looking to a monthly government cattle report on
Friday, which will update the market on supplies of cattle being
fattened in feedlots. Analysts surveyed by The Wall Street Journal
expect the total number of cattle on feed as of Oct. 1 to rise 5%
from a year earlier, with cattle placed in feedlots for fattening
-- an indication of supplies in the months to come -- up 7%. The
number of cattle marketed, or sent to slaughterhouses, likely rose
3%, according to average estimates.
With beef production this quarter already expected at a record,
analysts say growing supplies will pressure prices going into
2018.
Hog futures rose Wednesday, regaining ground after a selloff on
Tuesday. CME December lean hog futures rose 2.5% to 63.75 cents a
pound. That was the highest close since Sept. 5.
Ongoing strength in the cash hog market continued to attract
buyers to futures, analysts said. Cash hog prices rose almost $2 to
$60.35 per 100 pounds on Tuesday, and market participants expected
gains of as much as another $2 on Wednesday.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
October 18, 2017 15:32 ET (19:32 GMT)
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