June 21, 2018 / 7:34 PM / 9 months ago

LIVESTOCK-Bargain buying pares some CME hog futures losses

    CHICAGO, June 21 (Reuters) - Chicago Mercantile Exchange hog
futures        closed moderately higher on Thursday, with
support from bargain buying and short-covering that pared some
recent market losses amid U.S. trade worries, said analysts.
    U.S. hog farmers, still reeling from higher retaliatory
tariffs on pork imposed by China in early April, are bracing for
another round of stiffer import duties to take effect next
    Bullish investors were also drawn to futures that are
undervalued, or a discount, compared to CME's hog index for June
19 at 85.14 cents.
    Softer market-ready, or cash, hog prices, and pork at
wholesale, limited futures advances, said traders.
    There is talk that wholesale pork values may be close to
peaking following their 10-session streak of higher prices, said
Hehmeyer Trading + Investments director of commercial
agriculture Tom Cawthorne.
    "And packers want to build back those margins too," said
    Margins for some U.S. pork processors are at three-year lows
fueled by the recent surge in hog prices and U.S. trade fears.
    July         hogs ended up 0.450 cent per pound at 80.475
cents. August         closed 0.575 cent higher at 75.725 cents.

    CME live cattle        were pressured by profit-taking and
caution while waiting for the bulk of market-ready, or cash,
cattle to change hands, said traders.
    Futures' discount to a small number of cash cattle that
traded on Wednesday at $110 per cwt provided underlying market
support, they said.
    Packer bids for unsold cash cattle in the U.S. Plains were
at $108 per cwt against $115 asking prices in Texas and Kansas.
Last week, Plains cash cattle brought $110 to $113.
    Some packers may pay roughly the same as last week for
supplies given their slipping but still historically high
margins, said traders and analysts.
    They said other processors might wait for the forecasted
increase in cattle numbers soon.
    The U.S. Department of Agriculture (USDA) will issue its 
monthly Cattle-On-Feed report on Friday.             
    Simultaneously, USDA will publish its monthly cold storage
report. The data is expected to show 451.8 million pounds of
beef and 623.2 million pounds of pork in U.S. cold storage in
May, according to a few analysts. 
    June         live cattle closed down 0.375 cent per pound 
at 108.650 cents. August         ended 0.525 cent lower at
106.125 cents. 
    CME feeder cattle mimicked lower live cattle futures.
    August         closed 0.700 cent per pound lower at 148.725

 (Reporting by Theopolis Waters
Editing by James Dalgleish)
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