February 9, 2018 / 10:17 PM / 3 months ago

LIVESTOCK-Weaker cash, pork prices drop CME hog futures

    CHICAGO, Feb 9 (Reuters) - Chicago Mercantile Exchange lean
hog futures on Friday were pressured by lower cash and wholesale
pork prices, said traders.
    They said February futures lost technical support while
other contracts triggered sell stops after drifting below
Thursday's lows.
    February hogs         closed down 0.225 cent per pound to
73.175 cents, below the 20-day moving average of 73.204 cents.
Most-active April         finished 0.600 cent lower at 68.850
cents.
    A wide swath of snow in the U.S. Midwest snarled
transportation of hogs and shut down at least two packing
plants, traders and analysts said.             
    Some packers avoided paying more for hogs while trying to
improve their margins that were capped by the drop in wholesale
pork values due to slumping pork belly prices.                
    Still, lower wholesale pork belly prices might encourage
processors and bacon slicers to store more product for late
spring and summer use, a trader said.

    MOSTLY WEAK LIVE CATTLE, AGAIN
    CME live cattle contracts ended Friday's session as it did
on Thursday, mostly weaker as investors waited for this week's
weather-influenced cash cattle prices, said traders.
    Snow drifts in feedlots make it difficult to sort and load
cattle, while cold temperatures slow animal weight gains. Both
factors limit supplies to processors.
    February futures were supported by this week's potential
cash outcome, but other contracts were pressured by forecasts
for increased supplies ahead.
    "We should have a month or two of tighter (cattle) numbers
up front, but then the numbers get pretty sizeable once again,"
said INTL FCStone chief commodities economist Arlan Suderman.
    February         live cattle closed up 0.750 cent per pound
at 126.525 cents. April         ended down 0.100 cent at 123.625
cents, and June         finished down 0.100 cent at 115.425
cents.
    Wintry weather in the U.S. Plains and packers that raised 
bids to $126 per cwt on Friday from $124 earlier this week
encouraged February futures buyers. 
    Feedlots this week are asking $129 to $130 per cwt for their
animals that last week brought $125 to $126.
    Some processors may think twice about spending more for
supplies, as beef demand struggles against plentiful 
competitively-priced pork and chicken.
    When you look at expectations for increased beef, pork and
poultry production this year, "that's a lot of protein hitting
the market," said Suderman.
    Technical selling and weaker back-month CME live cattle
futures dragged down the exchange's feeder cattle contracts.
    March         feeders ended 0.900 cent per pound lower at
147.750 cents. 

 (Reporting by Theopolis Waters, Editing by Rosalba O'Brien)
  
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