May 11, 2018 / 8:08 PM / 12 days ago

LIVESTOCK-CME hog futures slump amid fund roll, NAFTA worries

    CHICAGO, May 11 (Reuters) - Chicago Mercantile Exchange lean
hog futures finished lower on Friday, hit by the "roll" by funds
into deferred months and uneasiness over North American Free
Trade Agreement (NAFTA) talks, said traders.
    "NAFTA fears, Goldman roll and premiums to the cash prices.
Everyone who bought futures this week decided to dump them all
in one day," said independent livestock futures trader Dan
Norcini.
    Friday was the last official day that CME livestock market
funds that track the Standard & Poor's Goldman Sachs Commodity
Index           sold, or "rolled," June futures mainly into
August.
    On Friday, Mexico's economy minister said his country would
not be rushed into revamping NAFTA to get a deal, a day after
U.S. House of Representatives Speaker Paul Ryan set a May 17
deadline for the end of negotiations.                         
    From January through March of 2018, Mexico was the top
destination for U.S. pork at 203,656 tonnes valued at $371.3
million, according to the U.S. Meat Export Federation.
    CME hog futures were over valued, or premium, to the
exchange's hog index for May 9 at 63.73 cents. The index is a
barometer of slaughter-ready, or, cash hog prices.
    May         hogs, which will expire at noon CDT (1700 GMT)
on Monday, closed down 0.175 cent per pound at 65.300 cents.
Most actively traded June         ended 2.225 cents lower at
75.100 cents. 
    
    CATTLE PARES EARLY LOSSES
    The exchange's live cattle contracts ended firmer after
short-covering and future's discount to this week's cash prices
lifted the market from morning lows, said traders.
    June         live cattle closed up 0.100 cent per pound at
107.625 cents. August         settled up 0.125 cent at 104.425
cents.
    Packers and feedlots in the U.S. Plains haggled over prices
for the bulk of unsold cash cattle after a few head on Thursday
fetched $120 to $122 per cwt. Last week's overall cash trade was
$118 to $128.
    Even if remaining cash prices are lower, there may not be
much of a futures response because of their steep discount to
cash, said CattleHedging.com President Larry Hicks.
    Market bulls expect prices for unsold cattle in line with 
last week's trade given strong packer profits and seasonal
increase in beef demand.                 
    Contrarians said cash prices have topped out seasonally in
the face of increased supplies ahead.
    Profit-taking and initial technical selling pressured CME
feeder cattle contracts.
    May         closed down 0.175 cent per pound at 138.425
cents.

 (Reporting by Theopolis Waters
Editing by Alistair Bell)
  
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