October 19, 2017 / 10:03 PM / in 4 months

LIVESTOCK-CME hogs hit 2-month high as cash prices trend upward

    * Live cattle closes weaker
    * Feeder cattle ends higher
    * USDA cattle report on Friday

    By Theopolis Waters
    CHICAGO, Oct 19 (Reuters) - Chicago Mercantile Exchange lean
hog futures        rose on Thursday, hitting their highest level
in two months led by steadily climbing prices for market-ready,
or cash, hogs as packers competed for supplies, said traders.
    December         hogs finished 0.500 cent per pound higher
at 64.250 cents, and February         ended 0.475 cent higher at
68.475 cent. 
    Daily hog slaughters have consistently made new records,
partly because new pork processing plants in operation are
buying animals to maintain market share and make good on meat
orders, a trader said.                   
    Soon farmers may be faced with less money for their hogs as
higher prices for them wear down packer profits, and retailers
switch to promoting more beef following the conclusion of
October National Pork month, a trader said.        
    
   LIVE CATTLE SOFT BEFORE REPORT
   Nearby CME live cattle settled modestly lower, pressured by
this week's less-than-expected cash prices and caution before
the U.S. Department of Agriculture's monthly Cattle-On-Feed
report on Friday, said traders.            
    "The market was just biding time until Friday's report,"
said Oak Investment Group President Joe Ocrant.
    October         live cattle, which will expire on Oct. 31, 
finished 0.275 cent per pound lower at 111.200 cents. Most
actively-traded December         closed down 0.500 cent to
116.150 cents.
    This week packers paid mostly $110 per cwt for cash cattle
in the U.S. Plains that a week earlier moved at $111, said
feedlot sources.
    Processors balked at paying more for supplies after two or
three weeks of higher cash prices trimmed their margins,
although those profits remain high historically, said analysts
and traders.
    They said processors have ample supplies now, but those
numbers could decline after some ranchers and feedlots moved
animals to market ahead of schedule to avoid possibly lower
prices in the weeks ahead.                  
    Buy stops and technical buying pulled up CME feeder cattle
contracts. Feeder cattle futures' discounts to CME's feeder
cattle index for Oct. 18 at 155.08 cents provided added market
support. 
    October         ended up 0.625 cent per pound to 153.150
cents.

 (Reporting by Theopolis Waters; Editing by David Gregorio)
  
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