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LIVESTOCK-Hogs extend losses on cash expectations; cattle firm
February 23, 2017 / 10:59 PM / 10 months ago

LIVESTOCK-Hogs extend losses on cash expectations; cattle firm

    * Hogs down nearly 6 pct in three sessions
    * Cattle futures mostly higher
    * U.S. pork, beef in cold storage less than expected

    By Michael Hirtzer
    CHICAGO, Feb 23 (Reuters) - U.S. lean hog futures       
fell more than 1 percent on Thursday, extending losses to their
third straight session, on pressure from expectations for
declines in Midwest cash hog markets, traders and analysts said.
    Lower wholesale pork prices this week, especially pork belly
cuts, also weighed on futures and squeezed packer profit
margins.
    "The (hog) futures market has been trying to say the cash
market is potentially coming down, and we're seeing that," said
Top Third Ag Marketing broker Craig VanDyke.
    CME April hogs        settled 1.175 cents lower at 66.575
cents per pound, the lowest since Dec. 30. The nearly 6 percent
decline in the past three sessions represented the biggest drop
for the contract since September.
    Futures already were trading at a discount to Midwest cash
hog markets. The declines on Thursday deepened futures' discount
and suggested that traders were preparing for more losses. Hogs
in Iowa and Minnesota fell $2.20 to $70.74 per cwt, according to
the U.S. Department of Agriculture.                    
    Monthly U.S. cold storage data released by USDA after the
close of trading showed 526.7 million pounds of pork in storage,
below average analyst estimates of 538.2 pounds. There were
14.014 million pounds of pork bellies in storage, a record low
for the month.             
    
    LIVE CATTLE GAIN, BEEF STOCKS SMALLER THAN EXPECTED
    Beef in cold storage totaled 537.54 million pounds, a record
high for the month but smaller than analyst estimates for 597.8
million pounds.
    "Call it bullish beef ... (and) slightly bullish pork as
well," one broker said of the cold storage data.
    CME live cattle futures        were mostly higher and feeder
cattle        narrowly higher to slightly lower in relatively
light-volume dealings.
    Cattle prices have been buoyed this week by higher steer
prices in Texas and Nebraska, but investors also were evening
positions ahead of USDA's monthly Cattle on Feed report due on
Friday. Analysts polled by Reuters expected an 11 percent spike
in cattle placed on feed during January, supplies that would be
available to beef packers in the coming months.             
    "The market has been pretty quiet," VanDyke said. "(Cattle)
cash strength is not necessarily encouraging aggressive selling
but, unfortunately, it's not encouraging aggressive buying
either."
    CME April live cattle        finished up 0.450 cent to
116.525 cents per pound and CME March feeder cattle        were
up 0.050 cent to 125.150.

 (Reporting by Michael Hirtzer; Editing by James Dalgleish)
  

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