June 14, 2018 / 8:56 PM / 2 months ago

LIVESTOCK-Trade fears drag down CME live cattle, hog futures

    CHICAGO, June 14 (Reuters) - Chicago Mercantile Exchange
live cattle       and hog        futures closed lower on
Thursday, partly weakened by uncertainty over U.S. trade with
China, traders said.
    China on Thursday urged the United States to make a "wise
choice" on trade, saying it was ready to respond in case
Washington chose confrontation, as U.S. President Donald Trump
prepares to decide whether to impose tariffs on Chinese goods.
            
    China had already hiked tariffs on U.S. pork and may
threaten to do the same for beef, said traders and analysts.
    "The fatigue of the too frequent threat of global
agricultural trade disruption seem to be wearing on U.S.
agricultural commodity prices today," said Cassandra Fish,
author of industry blog The Beef.
    CME live cattle futures selling intensified after packers in
Nebraska on Thursday paid $110 per cwt for a small number of
market-ready, or cash cattle - $4 to $5 lower than last week. 
    Packer bids for other cattle in Nebraska and elsewhere in
the U.S. Plains were at $110 versus $117 to $120 asking prices.
    Increased week-over-week cattle weights, which adds more
tonnage to already ample supplies, discouraged CME live cattle
market buyers. And, funds liquidated long positions after
futures fell below technical support levels.
    June         live cattle closed 1.675 cents per pound lower
at 106.250 cents. August         ended down 2.025 cents at
101.875 cents.
    Technical selling and lower live cattle futures sank CME's
feeder cattle contracts.
    August         closed down 2.025 cents per pound at 143.625
cents.

    HOG FUTURES TURN LOWER
    Profit-taking and trade jitters sent CME lean hogs lower
after two days of gains, driven by upward-trending cash and
wholesale prices, traders said.
    "The hog market was so overbought that we needed to have
some type of correction," said Midwest Market Solutions
President Brian Hoops. 
    Packers scrambled for supplies that have tightened
seasonally due to hot weather in parts of the Midwest that
slowed hog weight gains, a trader said.
    Grocers and restaurants are preparing to buy meat for the
Fourth of July holiday cook outs, he said.
    Hog futures felt more pressure from selling in the live
cattle market. And July future's premium to cash prices was more
pronounced after the June contract expired.
    June         hogs, which expired at noon CDT (1700 GMT)
settled up 0.175 cent per pound at 81.175 cents. Most actively
traded July         ended 1.150 cents lower at 81.625 cents.
August         closed 1.050 cents lower at 78.600 cents.

 (Reporting by Theopolis Waters; editing by Diane Craft)
  
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