July 26, 2018 / 9:22 PM / a year ago

LIVESTOCK-CME hog futures stumble on lower cash, pork prices

    CHICAGO, July 26 (Reuters) - Chicago Mercantile Exchange hog
futures ended lower on Thursday after packers paid less money
for market-ready, or cash, hogs as prices for pork at wholesale
eased, said traders.
    Packer interest in raising hog bids waned in the midst of
plentiful supplies and while Smithfield Foods closed some of
their plants to upgrade equipment, said traders and analysts.
    Thursday's U.S. hog slaughter totaled 367,000 head, 80,000
fewer than a week earlier, according to U.S. Department of
Agriculture data.             
    Wholesale pork values primarily drew pressure from lower
prices for pork bellies and picnic shoulder cuts - some of which
is used to make pulled pork.              
    Fund liquidation hastened market declines after some trading
months fell below key technical support levels.
    August         hogs ended down 1.500 cents per pound at
64.900 cents. October         closed 1.675 cents lower at 52.250
cents, and below the 10-day moving average of 52.842 cents.
    Technical selling and profit-taking undercut CME live cattle
contracts, which threaten how much feedlots receive for their
market-ready, or cash, cattle by late Friday, said traders.
    Despite futures' losses, the cash price outlook appeared
strong, said a feedlot manager. He cited firmer wholesale beef
prices, triple-digit packer margins and processor interest in
buying livestock.                          
    However Jim Clarkson, a broker with A&A Trading Inc said: "I
think that the packers are in control of this market and they're
not going to pay up." He pointed to ample captive supplies, or
cattle already under contract with packers.
    Packer bids for cash cattle in the U.S. Plains ranged from
$108 to $110 per cwt against feedlots asking $115 to $116 for
their animals. The bulk of cattle last week brought $113.
    August         live cattle closed 1.075 cent per pound lower
at 107.950 cents. October         ended 1.400 cents lower at
109.375 cents.
    Both contracts settled below their respective 200-day moving
average of 108.923 cents and 110.91 cents.
    Live cattle futures' retreat and technical selling pulled
down CME feeder cattle contracts.
    August         closed 1.400 cents per pound lower at 151.425

 (Reporting by Theopolis Waters
Editing by James Dalgleish)
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