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6 months ago
LIVESTOCK-Fund liquidation undercuts CME live cattle futures
February 10, 2017 / 9:17 PM / 6 months ago

LIVESTOCK-Fund liquidation undercuts CME live cattle futures

    * Feeder cattle end sharply lower
    * Lean hog contracts finish higher

    By Theopolis Waters
    CHICAGO, Feb 10 (Reuters) - Chicago Mercantile Exchange live
cattle futures closed lower on Friday, hit by sell stops and
fund selling after drifting below technical support levels, said
traders.
    February live cattle         closed 1.250 cents per pound
lower at 116.400 cents, and April         1.675 cents lower at 
113.150 cents.
    Both contracts slipped beneath their respective 10-day
moving averages of 116.605 and 114.865 cents.
    Jitters about next week's slaughter-ready, or cash, cattle
prices exerted more pressure on futures. Some packers have
already scaled back production to recoup lost margins and
improve beef cutout values.
    This week, cash cattle in the U.S. Plains traded at $119 to
$120.50 per cwt, steady to $1.50 higher than last week.
    The U.S. Department of Agriculture estimated this week's
cattle slaughter at 574,000 head, 19,000 fewer than last week
and down 27,000 from a year earlier.
    Friday's average beef packer margins were at a negative
$75.10 per head, down from negative $69.20 on Thursday and a
negative $57.05 a week ago, as calculated by HedgersEdge.com.
    The morning's choice wholesale beef price was down 67 cents
per cwt to $188.04 from Thursday. Select cuts rose 74 cents to
$186.56, the USDA said.
    Technical selling, higher corn prices and lower live cattle
futures sank CME feeder cattle contracts.
    March feeders         closed 1.550 cents per pound lower at
122.075 cents.
   
    HIGHER HOG FUTURES SETTLEMENT
    Firmer wholesale pork values, anticipation for
steady-to-higher cash prices and back-month bargain buying drove
up CME lean hogs, said traders.
    February hogs         ended up 0.325 cent per lb to 74.550
cents, and notched a fresh contract high of 74.975 cents. Most
actively traded April         closed up 0.300 cent to 71.075
cents.
    Friday morning's cash prices in the U.S. Midwest were steady
to firmer, according to regional hog merchants.
    U.S. government data on Friday morning showed the average
wholesale pork price up 36 cents per cwt to $85.09 from
Thursday, with price increases for all categories listed except
pork bellies.
    Some packers filled inventories into early next week but
could use a few pigs afterwards, an Iowa hog merchant said.
    Domenic Varricchio, a broker with Schwieterman Inc., said
cash prices remain solid and overall pork demand is holding up,
despite the pullback in pork belly values.
    "They're (packers) still making money hand over fist, so I
believe they want to process all the hogs they can get their
hands on," said Varricchio.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
  

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