July 24, 2018 / 9:52 PM / 10 months ago

LIVESTOCK-Cash price uncertainty weakens CME live cattle futures

    CHICAGO, July 24 (Reuters) - Chicago Mercantile Exchange
live cattle lost ground on Tuesday after investors exercised
caution in advance of this week's prices for market-ready, or
cash, cattle, said traders.
    There may have been some disappointment after initial bids
for cash cattle came in below last week's sales, a trader said. 
    On Tuesday packers had bid $110 per cwt for cash cattle in
Texas and Kansas with feedlots pricing animals at $115. Cash
cattle in the U.S. Plains last week fetched mostly $113.
    Bullish traders believe some processors that remain short
bought on supplies could pay up for cattle given their
impressive margins.
    Market bears contend that most packers may have bought
enough cattle last week to satisfy near-term production.
    Investors said Wednesday's Fed Cattle Exchange auction of
more than 1,200 animals should dictate this week's overall cash
prices. Last week, cattle at the auction brought $112 per cwt.  
     August         live cattle closed 0.675 cent per pound
lower at 108.050 cents. October         ended down 0.275 cent 
at 110.325 cents.
     CME feeder cattle tracked weaker live cattle contracts.
     August         closed down 0.500 cent per pound at 152.750
    CME nearby hog futures finished weaker, led lower by Tuesday
morning's lower cash and wholesale pork prices, said traders.
    They said short-covering and U.S. trade optimism lifted
deferred hog contracts.
    Production at JBS' Marshalltown, Iowa pork plant is slowly
resuming normal operations after a tornado hit the facility late
last week, traders and hog merchants said regarding lower cash
hog prices.
    A major processor is expected to briefly close some of its
plants for equipment upgrades, they added.
    On Tuesday, USDA announced an aid package for farmers hurt
by U.S. trade disputes, a day after Mexico signaled efforts to
jumpstart NAFTA trade talks.                          
    "Aid news might have rallied the market. But Trump sent out
a tweet yesterday which sounded optimistic on a NAFTA deal with
Mexico ... that, if true, would take a lot of concern out of the
hog market," said independent livestock futures trader Dan
    "Proof of the pudding is in the eating, however," said
    August         hogs ended 0.875 cent per pound lower at
65.550 cents. October         closed down 0.100 cent at 52.525

 (Reporting by Theopolis Waters
Editing by James Dalgleish)
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