July 27, 2018 / 8:30 PM / 5 months ago

LIVESTOCK-Slumping cash prices extend CME hog futures losses

    CHICAGO, July 27 (Reuters) - Chicago Mercantile Exchange
hogs        closed lower for a second day in a row on Friday,
hit by downward-trending prices for market-ready, or cash, hogs
amid plentiful supplies, said traders.
    Hog numbers are at a record high due to affordable feed and
farmers adding to herds to satisfy four new U.S. plants built in
late 2017.             
    Some plants typically allow employees time off this time of
year as a floater holiday, which gives processors a chance to
make repairs and upgrade equipment.
    Smithfield Foods           is undergoing "rolling outages"
in some of its hog processing facilities to modernize computer
software, the company said in a statement to Reuters.
    The U.S. Department of Agriculture (USDA) estimated this
week's total U.S. hog slaughter at 1.987 million head, 395,000
fewer than last week.             
    "There's no shortage of slaughter hogs," said Brock
Associates Inc. analyst Doug Houghton. 
    August         hogs ended down 1.250 cents per pound at
63.650 cents, and hit an all-time low for the contract at 63.525
cents. October         closed 1.375 cents lower at 50.875 cents,
and made a new contract low of 50.475 cents.
     
    LIVE CATTLE TURN UP  
    Technical buying and short-covering reversed Thursday's CME
market losses, said traders.
    "After staging a late day rally that erased a chunk of
yesterday’s sharp loses, today has offered zero explanation
regarding what yesterday meant if anything," said Cassandra
Fish, author of industry blog The Beef.
    Firmer wholesale beef values and future's discount to cash
prices, which are expected by late Friday, provided added market
support, they said.
    Future's recovery from Thursday's setback, and impressive
packer margins, restored faith among market bulls that packers
might pay up for supplies.
    Contrarians still pointed to ample cattle supplies.
    Packer bids for cash cattle in the U.S. Plains were $109 to
$110 per cwt versus $115 to $116 asking prices. Cash cattle last
week in the Plains fetched $113.
    August         live cattle closed up 0.675 cent per pound 
at 108.625 cents, and over the 200-day moving average of 108.900
cents. October         ended 1.100 cents higher at 110.475
cents, and above the 10-day moving average of 110.058 cents.
    CME feeder cattle took its cue from the higher live cattle
contracts.
    August         closed 0.875 cent per pound higher at 152.300
cents.

 (Reporting by Theopolis Waters
Editing by Susan Thomas)
  
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