June 6, 2018 / 8:56 PM / a year ago

LIVESTOCK-Strong cash prices reverses CME hog futures losses

    CHICAGO, June 6 (Reuters) - Chicago Mercantile Exchange lean
hogs        on Wednesday closed up sharply, spurred by
short-covering and escalating prices for slaughter-ready, or
cash, hogs that reversed Tuesday's market losses, said traders.
    On Tuesday, some CME hog contracts day fell more than 2
percent after Mexico imposed tariffs on U.S. pork following 
Washington's higher import duties on Mexican steel and aluminum.
    Fund buying and bargain hunting contributed to Wednesday's
market advances, traders and analysts said.
    June         hogs closed 1.650 cents per pound higher at
78.175 cents, and July hogs         ended 2.925 cents higher at
79.950 cents. 
    Both contracts finished above their respective 100-day
moving average of 78.057 cents and 79.496 cents.
    Packers paid more for hogs, despite single-digit margins,
after recent hot weather in parts of the Midwest slowed animal
weight gains, which delayed delivery to processors, said traders
and analysts.                  
    Processors also raised cash hog bids as grocers and
restaurants purchased meat for June 17 Father's Day
advertisements, they said.
    CME live cattle        rose for a second straight day,
fueled by short-covering and this week's steady-to-firmer cash
price outlook, traders said.
    June         live cattle closed 1.100 cents per pound higher
at 108.300 cents. August         ended up 0.525 cent at 104.575
    So far packers have tabled bids of $107 per cwt for
market-ready, or cash, cattle in the U.S. Plains versus $114 to
$115 asking prices. Last week, cash cattle overall in the Plains
brought mostly $110.
    No cattle changed hands at Wednesday's Fed Cattle Exchange.
    June cattle futures were driven by the likelihood of higher
cash prices, as packers focus on supplying their needs while
filling prebooked meat orders, said Cassandra Fish, author of
industry blog The Beef.
    "Packers, of course, are reluctant to give up any of their
historically wide, triple-digit margin. But at least in most
regions, higher money will be spent," she said.        
    Live cattle futures advances and weaker corn prices pushed
up CME feeder cattle contracts for a second day in a row.
Low-cost corn reduces input costs for feedlot operators.
   August         closed up 0.900 cent per pound higher at
147.025 cents.

 (Reporting by Theopolis Waters; editing by Jonathan Oatis)
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