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Michael Hirtzer

LIVESTOCK-Cattle futures weaken on technicals after disappointing cash deals

Dec 14 2018

By Michael Hirtzer CHICAGO, Dec 14 Chicago Mercantile Exchange live cattle futures were narrowly lower on Friday in a technical setback as some investors took profits after prices reached six-week highs on Thursday, traders and analysts said. Cash cattle trading at prices roughly unchanged from last week also helped to anchor the futures market, squelching earlier optimism for more robust demand from beef packers. Weaker wholesale beef prices, known as the boxed beef cutout, also ate into profit margins for packers. "It doesn't seem like they needed to pay up for cattle," one futures trader said of packers. "Without the support from the boxes, you had some people running for the hills." CME February live cattle eased 0.450 cent to settle at 122.400 cents per pound while January feeder cattle were down 0.150 cent to 145.775 cents. Cattle in Texas, Kansas and Nebraska fetched $118 to $119 per cwt, in cash deals that were about flat from sales last week, traders said. Choice-grade wholesale beef prices fell $1.51 to $210.96 per cwt, according to the U.S. Department of Agriculture. Lean hog futures were also mostly lower but held above Thursday's roughly two-week lows. Ample supplies continued to anchor hog prices. The most-active February hog futures contract was off 0.325 cent to 64.500 cents per pound. Hogs in the top cash market of Iowa and southern Minnesota edged up 7 cents to $46.61 per cwt, USDA data showed. Regulatory data released after the close of trading by the Commodity Futures Trading Commission showed that speculative investors increased their small net long, or bullish, bets in both lean hogs and feeder cattle futures and options, and trimmed their more sizable net long in live cattle during the week that ended on Tuesday. (Reporting by Michael Hirtzer; editing by Diane Craft)

LIVESTOCK-Cattle futures mixed on technicals after six-week high

Dec 13 2018

By Michael Hirtzer CHICAGO, Dec 13 Chicago Mercantile Exchange (CME) cattle futures were narrowly mixed on Thursday, with the most-active February contract easing slightly on technical selling after earlier notching fresh six-week highs, traders said. Investors were awaiting deals in cash cattle markets after expectations that packers would pay more for the animals this week prompted gains in futures on Wednesday. Beef packer profit margins have narrowed as cattle prices climbed this week while beef prices eased. But margins were still relatively robust, potentially enticing them to pay up for cattle. "The market is pricing the higher cash trade right now, but we don't have any confirmation" of deals, said Brian Hoops, president of Midwest Market Solutions. CME February live cattle settled 0.050 cent lower at 122.850 cents per pound, off the contract's earlier high of 123.275 cents. The thinly traded front-month December contract was up 0.325 cent to 119.450 cents, roughly on par with cash cattle trades last week of mostly $119 per cwt. January feeder cattle were up 0.400 cent at 147.975 cents per pound, the highest settlement since Nov. 28. Wholesale boxed beef prices climbed 22 cents to $212.47 per cwt, recouping a portion of losses earlier this week, according to U.S. Department of Agriculture (USDA) data. Average beef packer profit margins were $106.80 per cattle, down from $126.40 per head a week ago, according to advisory HedgersEdge LLC. For hogs, profit margins were $45.35 per head, up from $40.35 last week. Pork packers have benefited from weaker cash and futures as abundant hog supplies continued to anchor prices, even as traders were optimistic for higher prices and better demand next year. Most-active February hog futures fell 0.875 cent to 64.825 cents per pound, the lowest close since Nov. 28. The highly contagious African swine virus continued to force hog producers in top pork consumer China to cull herds. Weekly U.S. pork export sales to China and Hong Kong topped 3,000 metric tonnes for the current marketing year, USDA data showed on Thursday, even though China imposed tariffs on imports of U.S. pork earlier this year as part of the trade war. Those were the biggest sales to China and Hong Kong in about 66 weeks, with demand driven by the spread of the disease, said independent U.S. market analyst Bob Brown. "Their behavior seems to have changed in regard to pork," Brown said about China. "The actual amount they're taking into the country right now is increasing." (Additional reporting by Tom Polansek, editing by G Crosse)

LIVESTOCK-Cattle futures hit six-week high on technical buying

Dec 12 2018

By Michael Hirtzer CHICAGO, Dec 12 U.S. live cattle futures rose sharply for the second straight session on Wednesday, reaching a six-week high, on technical buying and expectations that beef packers would pay higher prices for cattle this week, traders said. Cattle futures had declined earlier on Tuesday before turning higher and then surpassing the previous session's peak. That so-called reversal enticed buyers on Wednesday, said independent futures trader Dan Norcini. "You had some momentum-based buying ... the technicals on the charts look really good," Norcini said. Chicago Mercantile Exchange February live cattle futures finished up 0.750 cent at 122.900 cents per pound, just below the session peak of 123.000 cents that represented the highest level since Oct. 30. CME January feeder cattle settled up 0.275 cent at 147.575 cents per pound, the highest since Nov. 28 and the third straight day of gains. Trading in cash markets for slaughter-ready cattle was not yet established but some dealers were optimistic for higher prices than the $119 per cwt fetched last week. Feedlots in the U.S. Plains were offering fewer animals for sale this week, traders said. Lean hog futures were mostly higher on bargain buying after prices fell earlier in the session. Most-active February lean hogs climbed 0.500 cent to 65.700 cents per pound, recovering from their two-week low of 64.775. Hogs had been under pressure from weaker cash hog prices. However, average hog weights in the top market of Iowa and Minnesota fell to 284.0 pounds, down from 284.5 pounds a week ago and 286.1 pounds a year ago, according to the U.S. Department of Agriculture. Lower average weights result in reduced overall supply. "That 0.5 drop week over week will be viewed as friendly," one hog broker said. Additionally, more cases of the highly contagious African swine fever virus were reported in top hog producer and pork producer China. Expectations the disease could force China to import more pork has bolstered U.S. hog prices for weeks. China's agriculture ministry said two new outbreaks were confirmed in Sichuan and Qinghai provinces. (Reporting by Michael Hirtzer; editing by Chris Reese)

LIVESTOCK-Cattle futures climb on technical buying, demand optimism

Dec 11 2018

By Michael Hirtzer CHICAGO, Dec 11 Chicago Mercantile Exchange live cattle futures gained about 1 percent on Tuesday, lifted by technical buying and optimism for the continued robust demand for cattle and beef, traders and analysts said. Cattle futures shrugged off three straight sessions of declines to rise to the highest levels in about a week. Stronger wholesale beef prices and expectations that feedlots would offer fewer cattle for sale this week helped to propel the gains, with CME February live cattle finishing up 0.950 cent at 122.150 cents per pound. "Some of the recent data has been supportive to the (cattle) market. The beef cutout values especially have been better than people expected given how big the slaughter numbers have been," said Steiner Consulting Group analyst Altin Kalo. The closely watched weekly comprehensive beef cutout report on Monday showed beef prices at $209.57 per cwt, up 14 cents from the previous week. Prices rose at a time when they typically ease as many retailers have already purchased meat to sell during the holidays. Daily beef cutout prices were lower on Tuesday but prices remained near the highest levels in weeks, according to U.S. Department of Agriculture data. "That's giving people confidence that demand is in good shape," Kalo said of beef prices. CME January feeder cattle futures jumped 2.275 cents to 147.300 cents per pound. Meanwhile, lighter-weight feeder steers were up $2 to $3 per cwt at a weekly cattle auction in Oklahoma City, the USDA said. Lean hog futures were mostly lower, weighed down by abundant hog supplies and weaker cash prices. "Most plants have all the pigs they need and then some," one cash hog broker said. Most-active February hog futures fell 1.625 cents to 65.200 cents per pound, about a one-week low. (Reporting by Michael Hirtzer; Editing by Lisa Shumaker)

LIVESTOCK-Live cattle, lean hog futures mostly lower on technical selling

Dec 10 2018

By Michael Hirtzer CHICAGO, Dec 10 U.S. livestock futures were mostly lower on Monday, with both live cattle and lean hogs succumbing to pressure from technical selling and expectations for weaker cash prices, traders and analysts said. Prices for each eased amid a lack of fresh fundamental news to propel gains. Hogs had climbed last week, lifted in part on optimism that top pork consumer China could begin buying U.S. soybeans, pork and other goods for the first time in months as the world's two largest economies negotiated to end a trade war. But with few signs of new Chinese demand, prices for hogs have given back some of last week's gains. Chicago Mercantile Exchange February lean hog futures fell 1.050 cents to 66.825 cents per pound. CME February live cattle was down 0.325 cent to 121.200 cents per pound, easing for the third straight session after hitting a multi-week high on Dec. 5. Thinly traded CME January feeder cattle futures were up 0.650 cent to 145.025 cents. Prices for hogs and cattle, and pork and beef, often decline around this time of year after retailer buying ahead of the holiday season slows. Many retailers have already purchased the meat they need to sell for the Christmas and New Year's Day holidays at the end of the month. "It feels like holiday trade is under way," one independent futures trader said. The U.S. Department of Agriculture said it was rescheduling the release of its monthly Cattle on Feed report and quarterly Hogs and Pigs report to Dec. 20, a day earlier than previously planned. No reason was offered. Weekly data released by the Commodity Futures Trading Commission on Monday showed that in the week ended Dec. 4 speculative investors boosted their net long, or bullish, stake in live cattle futures. The investors also trimmed their net long in hogs and extended a net short in feeder cattle. (Reporting by Michael Hirtzer; Editing by Chris Reese)

China buys U.S. pork despite trade tariffs as hog disease spreads

Nov 29 2018

CHICAGO China is loading up on U.S. pork, despite import tariffs imposed due to the trade war, as a highly contagious swine disease ravages the Chinese hog herd.

U.S. ethanol prices drop to 13-year lows on bigger supply

Nov 28 2018

CHICAGO, Nov 28 Prices for U.S. ethanol fell to the lowest levels in 13 years on Wednesday, pressured by bigger-than-expected output and larger supplies of the corn-based biofuel, traders said.

LIVESTOCK-Cattle, hog futures gain in thin trading on demand optimism

Nov 23 2018

By Michael Hirtzer CHICAGO, Nov 23 U.S. livestock futures were higher on Friday, with lean hogs rising sharply and cattle notching relatively smaller gains as each market was buoyed by hopes of better meat demand, traders said. Hog futures on the Chicago Mercantile Exchange continued to rise on expectations that the spreading African swine fever virus in top hog producer China will force buyers to boost imports. China officials on Friday said they were working to keep hog and pork supplies stable as farmers culled herds due to the highly virulent disease. Even with China tariffs on imports of U.S. pork, increased shipments of the meat from Europe or South America could have ripple effects that would prompt demand for American supplies. U.S. Department of Agriculture data on Wednesday showed smaller year-on-year domestic pork supplies in cold storage, partially driven by increased exports. "You have the underlying support from the African swine fever that just keeps getting worse," said U.S. independent futures trader Dan Norcini. "Cold storage was friendly to the market, if not outright bullish. We have record (hog) slaughter numbers but the demand for pork is pulling supplies down," he added. CME February lean hog futures settled up 1.650 cents at 67.825 cents per pound. The contract surged to a lifetime high on Tuesday before easing on Wednesday and then clawing back a portion of those declines on Friday. CME February live cattle futures were up 0.175 cent to 120.925 cents per pound, a three-week high. January feeder cattle were up 0.750 cent to 149.375 cents. Beef packers after the close of trading on Wednesday began bidding more aggressively to buy cattle in cash markets, ultimately paying about $116 to $117 per cwt, in sales that were higher than the previous week's deals of mostly $113. Wholesale beef prices have been relatively strong, bolstering profit margins for meat packers. "Beef has been hanging in there. Maybe we have some demand kicking in. People will be sick of turkey, obviously," Norcini said. Trading volume was thin in an abbreviated session following Thursday's U.S. Thanksgiving Day holiday when many Americans dine on turkey. Stock indexes and crude oil were lower. Such "outside markets" often weigh on cattle as consumers often spend less on pricier dining options when financial markets falter. "The good cash trade opened us up a little bit," Top Third Ag Marketing analyst Craig VanDyke said of cattle. "That's nice to see with outside markets being as heavy as they are." (Reporting by Michael Hirtzer Editing by James Dalgleish)

LIVESTOCK-Cattle futures rally after bullish USDA data

Nov 21 2018

By Michael Hirtzer CHICAGO, Nov 21 Chicago Mercantile Exchange cattle futures were higher on Wednesday, extending earlier small gains after government supply reports showed fewer-than-expected U.S. cattle supplies, traders said. U.S. Department of Agriculture monthly Cattle on Feed data showed 11.692 million cattle in U.S. feedlots as of Nov. 1. That figure was 3 percent higher than a year ago but below analysts' expectations for a 4.4 percent increase. Placements of cattle in feedlots during October totaled 2.248 million, down 6 percent from a year ago and well below expectations for only a 0.9 percent decline. Fewer cattle in feedlots suggested less would be available to beef packers, largely between March and June of 2019. "It means the supplies are going to tighten up a little bit as we get into next year," said Don Roose, president of the brokerage U.S. Commodities. "It was a report that basically was positive across the board." Live cattle futures jumped more than 1 percent after the midday data while feeder cattle gained as much as 2 percent before each market pared gains. February live cattle settled up 1.025 cents at 120.750 cents per pound while January feeder cattle climbed 1.750 cents to 148.625. Uncertainty over how aggressively beef packers would bid to buy cattle in cash markets limited potential gains in futures despite the supportive USDA data, traders and analysts said. Separate USDA monthly data showed 515.7 million pounds of beef and 570.6 million pounds of pork in cold storage at the end of October, each relatively close to analyst estimates for 512.7 million pounds of beef and 573.4 million pounds of pork. Abundant supplies of both red meat and poultry have anchored meat prices and prices for cattle, hogs and chicken this year. However, the spreading African swine fever virus in top pork consumer and producer China has bolstered hog futures for weeks. China on Wednesday issued new rules to tighten notification of cases of African swine fever, including incentives for whistleblower, amid concerns that outbreaks of the highly contagious disease are being under-reported. There have been more than 60 outbreaks in 18 provinces since August. CME February lean hogs settled down 0.950 cent at 66.175 cents per pound, declining the second straight session after surging to a life-of-contract high earlier on Tuesday. CME livestock trading will halt on Thursday for the U.S. Thanksgiving Day holiday. (Reporting by Michael Hirtzer; Editing by Richard Chang)

LIVESTOCK-Hog futures fall after contract highs on profit-taking

Nov 20 2018

By Michael Hirtzer CHICAGO, Nov 20 Chicago Mercantile Exchange lean hog futures tumbled 3 percent on Tuesday, reversing after hitting contract highs as investors locked in profits ahead of Thursday's U.S. Thanksgiving Day holiday, traders said. Hog futures had gained in eight out of the past nine sessions on hopes of stronger pork demand, especially in export markets as the African swine fever virus forced farmers to cull hog herds in top producer and consumer China. But domestic demand for pork typically slows around this time of year. Many retailers have purchased the meat they intend to sell during the holiday season, limiting new orders. An increased U.S. hog slaughter also pointed to abundant pork supplies. Late-morning U.S. Department of Agriculture data showed wholesale pork prices, known as the cutout, down $2.37 to $66.44 per cwt. "Midday cutouts were a big factor in the decline (in hog futures)," said Midwest Marketing Solutions analyst Brian Hoops. "We are going into a period of seasonal weakness ... consumers will be stocking up on meat; end users will not," Hoops added. CME February lean hogs settled down 1.900 cents at 67.125 cents per pound, off their earlier lifetime peak of 69.500 cents. Global Commodities Analytics analyst Mike Zuzolo said some traders were unwinding long hog-short soybean spreads. Soybean futures had been sharply lower on Monday, before rising on Tuesday. "I think we are unwinding spreads ahead of the holiday," Zuzolo said. USDA DATA AWAITED Cattle futures were mostly lower, pressured in part by expectations that a USDA report due on Wednesday will show larger amounts of the animals in U.S. feedlots as of Nov. 1. CME February cattle futures were down 0.275 cent to 119.725 cents per pound and January feeder cattle were down 0.400 cent to 146.875 cents. "Nobody wants to take a lot of positions until they see what that report has to say," Hoops said. USDA will release monthly Cattle on Feed and Cold Storage data during the trading session on Wednesday. Analysts polled by Reuters expected USDA to estimate on-feed supplies at 104.4 percent of a year ago. A few analysts estimated pork supplies in cold storage of 573.4 million pounds, which would be down from 598.4 million pounds a year ago. Beef supplies were estimated at 512.7 million pounds, which would be up from 507.0 million pounds last year. (Reporting by Michael Hirtzer Editing by James Dalgleish)

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