June 12, 2018 / 10:04 PM / a year ago

LIVESTOCK-CME hogs snap back on higher cash, wholesale pork prices

    CHICAGO, June 12 (Reuters) - Chicago Mercantile Exchange hog
futures on Tuesday recovered from Monday's selloff, helped by
higher wholesale pork values and surging market-ready, or cash,
hog prices, traders said.
    Fund buying and bargain hunting enhanced futures advances,
they said.    
    June         hogs, which will expire on Thursday, closed up
0.375 cent per pound at 80.525 cents. Most actively-traded July
        ended 2.050 cents higher at 81.450 cents, and above the
200-day moving average of 80.283 cents.
    Packers paid up for hogs, at the detriment of their margins,
as supplies tighten seasonally, said traders and analysts.
    They said processors charged retailers more for pork to
offset unprofitable margins. Grocers and restaurants also bought
meat for spring grilling and June 17 Father's Day
advertisements, they added.         
    Most CME live cattle contracts gained modestly after
investors bought deferred months and simultaneously sold June 
in a trading strategy known as bear spreading, said traders.
    They said uneasiness about this week's cash cattle prices 
further pressured June live cattle. But future's discount to
cash price expectations limited market losses, they added.
    June         live cattle closed down 0.125 cent per pound at
108.525 cents. August         ended up 0.125 cent at 104.300
cents, and October         finished 0.350 cent higher at 107.350
    Feedlots in Kansas and Texas are asking $117 per cwt for
their slaughter-ready, or cash, cattle with no bids from
packers. Last week, cash cattle in the U.S. Plains traded from
$114 to $115.
    Processors seem less willing to compete for animals because
there are more of them for sale than last week, a trader said.
Some packers may be satisfied with current inventories while
waiting for the forecasted increase in cattle numbers.
    The market is anticipating larger cattle supplies, but are
unsure when that will happen, said Oak Investment Group
President Joe Ocrant.
    CME feeder cattle drew support from live cattle futures
gains, but were pressured by higher corn prices that tend to
increase input costs for feedlot operators.
    August         closed up 0.225 cent per pound at 146.175
cents. September         ended unchanged at 147.250 cents.
October         finished 0.400 cent lower at 147.175 cents.

 (Reporting by Theopolis Waters
Editing by Chris Reese)
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