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LIVESTOCK-Bargain hunters, fund buying boosts CME hog futures
October 2, 2017 / 7:58 PM / 2 months ago

LIVESTOCK-Bargain hunters, fund buying boosts CME hog futures

    * Live cattle snaps 3-day winning streak
    * Feeder cattle contracts end lower

    By Theopolis Waters
    CHICAGO, Oct 2 (Reuters) - Chicago Mercantile Exchange lean
hog futures finished sharply higher on Monday, fueled by bargain
buying in the technically oversold market, said traders.
    They said funds helped accelerate market advances after
contracts punched through technical resistance levels.
    October         hogs, which will expire on Oct. 13, ended
1.850 cents per pound higher at 57.250 cents, and above the
10-day moving average at 56.698 cents. Most actively traded
December         finished 2.025 cents higher at 61.975 cents,
and above the 200-day moving average of 61.752 cents.
    The market was overdone to the downside and Monday's upward
correction may have been a natural response to significant
losses over the past several weeks, said West Oak Commodities
analyst Tom Tippens.
    He referred to the hog supply buildup since last summer that
pressured market-ready, or cash, hog prices for two months and
dropped future's        from their early-August highs.
    CME lean hogs further gained upward momentum, partly driven
by last Friday's higher cash prices that turned lower on Monday
morning in light volume. [        
    Still in the face of record high hog slaughters, pork demand
is expected to remain solid over the next few weeks as National
Pork Month in October gets underway.             

    LIVE CATTLE TURN LOWER     
    Fund liquidation and profit-taking ahead of slaughter-ready,
or cash, cattle prices later this week snapped CME live cattle's
       three-day winning streak, said traders.
    They said that some investors sold CME live cattle futures
and simultaneously bought lean hog contracts.    
    October         live cattle finished 1.257 cents per pound
lower at 107.825 cents, and below the 20-day moving average of
107.930 cents. December         closed 1.825 cents lower at
113.425 cents, and below the 100-day moving average of 114.561
cents.
    Last week the bulk of cash cattle in the U.S. Plains traded
at $108 per cwt, generally steady with the week before.
    Although packer profits remain exceptional, they may resist
paying up for cattle given the highest slaughter of the year
last week - which implies ample supplies, said traders and
analysts. 
    They said processors also might draw from cattle contracted
against the futures market.
    Furthermore, beef demand faces headwinds as moderating fall
temperatures in the Plains allow animals to gain weight faster,
creating more beef tonnage to compete with abundant pork and
chicken supplies.           
    Technical selling, live cattle futures' retreat and
steady-to-lower cash feeder cattle prices sank CME feeder cattle
contracts.
   October         ended 1.875 cents per pound lower at 150.350
cents.

 (Reporting by Theopolis Waters; Editing by Steve Orlofsky)
  

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