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Michael Hirtzer

Trade war shifts feed for U.S. hogs away from ethanol byproduct

17 Jan 2019

CHICAGO A steep downturn in U.S. ethanol output linked to the trade war with China is raising costs for American farmers who feed a byproduct of the corn-based biofuel to hogs, cattle and chickens.

LIVESTOCK-Cattle futures extend slide to 2-week low on technicals

04 Jan 2019

By Michael Hirtzer CHICAGO, Jan 4 Chicago Mercantile Exchange live cattle futures slumped to a two-week low on Friday, extending a decline to the fifth consecutive session on pressure from technical selling, traders and analysts said. Feeder cattle and lean hog futures also eased, with feeders weighed down by rising corn prices that raised costs to fatten animals. Cash cattle in the U.S. Plains traded at mostly $123 per cwt on Thursday - sales that were about unchanged from the previous week and a sell signal for some futures traders. "The steady cash must have been a disappointment. A lot of the trade expected it to go higher," said Archer Financial Services broker Dennis Smith. The U.S. Department of Agriculture on Friday said cash cattle trades on Thursday in the Plains totaled 50,500 head at an average price of $122.83 per cwt. CME February live cattle settled down 1.300 cent at 121.925 cents per pound, the lowest level since Dec. 20. The contract's weekly decline of 1.8 percent was the biggest since early in November. CME March feeder cattle were off 1.625 cents to 142.825 cents per pound, the lowest since Dec. 18. Cattle prices last week reached multi-month highs before turning lower this week. "Live and feeder cattle failed to bounce back on the challenging week," CHS Hedging said in a client note. CME February hog futures settled down 0.200 cent at 61.950 cents per pound as some investors took profits after the hog market climbed for three straight sessions. (Reporting by Michael Hirtzer Editing by Leslie Adler)

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

03 Jan 2019

By Michael Hirtzer CHICAGO, Jan 3 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)

LIVESTOCK-Hog futures jump on hopes of U.S. pork exports to China

02 Jan 2019

By Michael Hirtzer CHICAGO, Jan 2 U.S. lean hog futures jumped to a nearly two-week high on Wednesday on speculation that exports of American pork to China will rise in the coming months, traders and analysts said. Representatives from the United States and China were negotiating to end the trade war between the world's biggest economies that has impeded shipments of pork, soybeans and other goods. China also was working to slow the spread of the highly contagious African swine fever virus. Each factor could boost exports of U.S. pork to China, where the ASF virus has forced the top consumer of the meat to cull hog herds. China on Wednesday reported a new outbreak on a farm with 73,000 pigs in Heilongjiang province while the agriculture ministry said slaughterhouses will have to test pig products for presence of the virus before selling them at market. Chicago Mercantile Exchange February lean hog futures surged as much as 4 percent to a high of 63.425 cents per pound before the contract settled at 61.700 cents, up 0.725. "The news of ASF at the really big farm in China was the catalyst," independent livestock futures trader Dan Norcini said of the rally in hog futures. He added that some commercial hog operations likely sold futures to lock in higher prices, which helped bring prices off their highs. China still has a 25 percent tariff on imports of American pork. Buyers in China have increased purchases of U.S. pork in recent weeks for supplies to be shipped at some point in 2019. But more sales were needed to convince some traders that China would buy enough pork to help eliminate large U.S. stockpiles. "This is another feather in the cap for the bulls, but we still don't have any business to China," Norcini said of pork exports. Cattle futures were mostly lower on Wednesday, weakening on technical selling amid a lack of news to propel gains. CME February live cattle settled down 0.350 cent at 123.525 cents per pound and CME March feeder cattle shed 0.800 cent to end at 145.950 cents per pound. (Reporting by Michael Hirtzer Editing by Tom Brown)

Pacific Ethanol plans to idle western section of Nebraska plant: sources

02 Jan 2019

PHILADELPHIA/CHICAGO Pacific Ethanol Inc plans to idle the western portion of its ethanol plant in Aurora, Nebraska, over the next two weeks amid historically weak margins that have forced the industry to throttle back production, according to three sources familiar with the plant's operations.

UPDATE 1-Pacific Ethanol plans to idle western section of Nebraska plant -sources

02 Jan 2019

PHILADELPHIA/CHICAGO, Jan 2 Pacific Ethanol Inc plans to idle the western portion of its ethanol plant in Aurora, Nebraska, over the next two weeks amid historically weak margins that have forced the industry to throttle back production, according to three sources familiar with the plant's operations.

LIVESTOCK-Cattle futures weaken on profit-taking, hogs firmer

31 Dec 2018

By Michael Hirtzer CHICAGO, Dec 31 U.S. live cattle futures finished slightly lower on Monday as traders locked in profits in end-of-year position squaring, after prices earlier touched contract highs, traders said. Lean hog futures were mostly higher, buoyed by short-covering and position squaring on the final trading day of the month, quarter and year. Cattle futures climbed for much of last week due to harsh winter weather in the U.S. Plains that muddied some feedlots, hampered shipments of animals and slowed weight gains as temperatures dropped. The weather issues contributed to higher prices in cash cattle markets, with slaughter steers fetching about $123 per cwt in trades after futures markets were closed on Friday. The U.S. Department of Agriculture pegged volume of cattle traded in the cash cattle market last week at 86,273 head, up from 82,546 the previous week and 77,624 a year ago. Midwest Marketing Solutions broker Brian Hoops said that with the storms moving out of the region, beef packers might not have to bid as aggressively to buy cattle. "The forecasts are a little better this week, so we probably will not get that push," Hoops said. Most-active Chicago Mercantile Exchange February cattle settled down 0.300 cent to 123.875 cents per pound, after earlier reaching a contract peak of 124.950 cents. Cattle on a continuous chart climbed 1.5 percent for the year, the second straight annual gain. "We pushed to some new highs in cattle and faded back," Hoops added. Feeder cattle futures also eased on Monday, giving back a small portion of recent gains. Most-active March feeders were down 0.125 cent to 146.750 cents per pound. Feeder futures for the year were about 2 percent higher. Meanwhile, hog prices were firmer in technically driven trade after declining for much of the last week. February lean hog futures settled up 0.325 cent at 60.975 cents per pound. Hogs on a continuous chart lost about 15 percent for the year, under pressure from record-large U.S. supplies and trade wars that impeded American pork exports to top markets including Mexico and China. (Reporting by Michael Hirtzer Editing by Leslie Adler)

Trade wars cost U.S., China billions of dollars each in 2018

31 Dec 2018

CHICAGO The U.S.-China trade war resulted in billions of dollars of losses for both sides in 2018, hitting industries including autos, technology - and above all, agriculture. | Video

Trade wars cost U.S., China billions of dollars each in 2018

31 Dec 2018

CHICAGO The U.S.-China trade war resulted in billions of dollars of losses for both sides in 2018, hitting industries including autos, technology - and above all, agriculture. | Video

LIVESTOCK-Cattle futures edge higher on technical buying, U.S. weather

28 Dec 2018

By Michael Hirtzer CHICAGO, Dec 28 Chicago Mercantile Exchange live cattle futures edged higher on Friday, buoyed by technical buying and as wintry weather in the U.S. Plains hampered transportation of animals to market, traders and analysts said. Heavy snowfall, rains and falling temperatures in much of the central United States stressed livestock, likely slowing weight gains in cattle. Beef packers lifted bids to buy cattle but trading in cash markets was slow. "Live and feeder cattle traded higher from the harsh weather that pummels the Midwest," CHS Hedging said in a market note. Most-active CME February live cattle settled up 0.225 cent at 124.175 cents per pound, finishing below Thursday's life-of-contract highs of 124.900 cents. CME January feeder cattle climbed to the highest since Nov. 26 before finishing up 0.075 cent at 149.075 cents. "Feedlots continue to hold out for higher prices amid live cattle futures strength and rough weather conditions," brokerage Brock & Associates said in a client note. Lean hog futures were narrowly mixed as traders consolidated positions with 2018 drawing to a close. Hog futures have stayed above Wednesday's six-week lows but struggled to bounce significantly from those lows in light trading. February lean hog futures settled up 0.075 cent at 60.650 cents per pound and April hogs down 0.175 cent at 66.500 cents. Hogs in the top cash market of Iowa and southern Minnesota were 39 cents higher to an average price of $44.93 per cwt, according to the U.S. Department of Agriculture. (Reporting by Michael Hirtzer; Editing by Richard Chang)

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