January 3, 2019 / 11:06 PM / 3 months ago

LIVESTOCK-Cattle futures ease on technical selling after steady cash sales

    By Michael Hirtzer
    CHICAGO, Jan 3 (Reuters) - U.S. cattle futures eased as much
as 1 percent on Thursday, weighed down by technical selling and
steady deals in cash markets in the southern Plains, traders and
analysts said.
    Live cattle futures         weakened for the fourth straight
session on the Chicago Mercantile Exchange. The market had
climbed to life-of-contract highs on Dec. 31, partially on
expectations that snows, rains and falling temperatures last
week in the U.S. Plains would hamper the transportation of
livestock and bolster cash prices.
    But prices have given back some of those gains, with the
front-month February live cattle         finishing down 0.300
cent to 123.225 cents per pound, a one-week low.
    CME March feeder cattle         eased 1.500 cent to 144.450
cents, lowest since Dec. 20.
    Cash cattle prices late last week surged about $4 per cwt to
$123 per cwt. Trade developed at those same prices on Thursday
in Kansas and Nebraska, disappointing some traders who had
anticipated higher prices.         
    However, the price levels likely were attractive to feedlots
which had already hedged positions in the futures market,
according to cattle analyst David Hales.
    "It's a good number. It's a great basis," Hales said.
    The basis is the difference between cash cattle sales and
the backing futures price.
    Hales added that demand from beef packers was relatively
strong after few animals traded last week.
    Cargill Inc          , a major beef packer and one of the
world's largest privately held businesses, reported a 20 percent
decline in quarterly earnings on Thursday, pressured in part by
the struggling Chinese hog sector.
    However, Cargill's beef business remained strong.
"Performance in North American protein moved higher, as robust
demand for beef and large supplies of fed cattle boosted beef
production and sales to domestic and export markets," Cargill
said in a release.
    Lean hog futures         were mostly higher but held below
Wednesday's session peaks as traders continued to bet on a
pickup in U.S. pork exports to China. China, battling the highly
contagious African swine fever virus, continued to cull hog
herds and was widely expected to boost meat imports at some
point this year.
    CME February hogs         were up 0.450 cent to 62.150
cents.
    "February hogs traded above the 200-day moving average for
the second day in a row but was unable to settle above that
level at $62.52," CHS Hedging said in a market note.

 (Reporting by Michael Hirtzer; Editing by Richard Chang)
  
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