June 29, 2017 / 10:37 PM / a month ago

LIVESTOCK-CME hog futures climb ahead of USDA report

3 Min Read

    * USDA report neutral for futures Friday
    * Live cattle finishes mostly higher
    * Feeder cattle extends gains

    By Theopolis Waters
    CHICAGO, June 29 (Reuters) - Chicago Mercantile Exchange
lean hog futures settled higher on Thursday, and the July
contract notched fresh highs, supported by their discounts to
cash prices and fund buying prior to the U.S. Department of
Agriculture's neutral quarterly hog report, said traders.
    The USDA's report showed a record number of hogs for the
March-May period, but the results were within analysts'
forecasts.             
    July         ended 1.550 cents per pound higher at 89.475
cents, and hit a fresh high of 89.650 cents. August        
finished 1.275 cents higher at 80.750 cents, and above the
20-day moving average of 80.378 cents.
    Hog futures received an added boost from surprising cash
price strength, despite plants scheduled to close during the
U.S. Fourth of July holiday.             
    Solid profits for packers motivated them to line up hogs for
what could be a big post-Saturday holiday slaughter, a trader
said.
    Retailers may buy small amounts of pork until they determine
 how much of it moved during the holiday, he said.             
    
    MAINLY HIGHER LIVE CATTLE
    Most live cattle contracts at the CME gained, led by
technical buying and futures' discounts to initial cash prices,
said traders.
    They said positioning as the holiday and the end of the
quarter draw near contributed to advances.
    June        , which will expire on Friday, closed down 0.050
cent per pound to 120.200 cents. Most actively traded August
        ended 0.875 cent higher at 116.500 cents, and above the
10-day moving average of 116.050 cents. October         finished
1.325 cents higher at 114.975 cents.
    On Thursday, a small number of market-ready, or cash, cattle
in the U.S. Plains brought $119 to $120 per cwt, compared with
$118 to $123 last week, said feedlot sources.
    Packing plant holiday shutdowns and seasonally slumping
wholesale beef demand weakened most cash returns so far this
week, said traders and analysts.             
    Market bulls believe impressive packer profits and fewer
animals for sale than last week might underpin prices for unsold
cattle.              
    Technical buying, buy stops and live cattle futures advances
lifted CME feeder contracts        for a second straight
session.
    August feeders         ended 0.775 cent per pound higher at
147.175 cents.

 (Reporting by Theopolis Waters; Editing by Jonathan Oatis)
  

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