U.S. live cattle, hog futures pull back as Dow retreats

U.S. live cattle and hog futures finished lower on Tuesday in response to the stock market’s steep drop that ignited active fund selling in a wide range of commodities, said analysts and traders.
U.S. stocks plunged following weak earnings that fueled worries about a global economic slowdown.
"All softs, grains and metals were lower amid economic weakness that likely kept money/fund managers on the sidelines in the cattle futures market," said David Hales, president of Hales Trading Co.
The Chicago Mercantile Exchange live cattle December contract fell below the 100-day moving average of 127.15 cents which triggered fund liquidation.
Spot October closed down 0.400 cent per lb to 126.000 cents. Most-actively traded December ended at 126.850 cents, 0.425 cent lower.
Futures losses were limited by wholesale beef prices that rose after packers cut slaughter rates in an effort to shore up their sagging bottom lines.
HedgersEdge.com estimated beef packer margin for Tuesday at negative $24.35 per head, compared with negative $14.30 on Monday and negative $26.65 for Oct. 16.
The wholesale price for choice beef Tuesday morning was 62 cents per cwt higher than Monday to $198.97 and select cuts jumped $1.62 from a week earlier to $183.15, according to the U.S. Department of Agriculture.
USDA estimated the combined cattle slaughter for Monday and Tuesday at 252,000 head, 1,000 less than a week earlier and down 6,000 from the same period a year ago.
CME feeder cattle closed lower on spot-October positioning before it expires on Thursday and the weaker live cattle market.
Spot October feeder cattle closed down 0.250 cent to 145.425 cents per lb. Most-actively traded November ended at 147.050 cents, 0.700 cent lower.

Hogs fall
Hogs at the CME closed lower on fallout from the decline in equities and expectations for cash hog prices to decline as wholesale pork demand slows, said traders and analysts.
December and February slipped below their respective 10-day moving averages of 78.55 and 84.75 cents, setting off fund selling.
December closed 0.550 cent per lb lower at 78.125 cents. February ended at 84.650 cents, down 0.525 cent.
The average hog price in the Iowa/Minnesota market Tuesday morning was up 92 cents per cwt from Monday to $83.78, but the eastern belt hog price dropped $1.04 to $79.68.
Also, hog futures moved lower in a bearish response to record-high pork inventories for September, as reported by USDA in its cold storage report on Monday.
K&S Financials analyst Jack Salzsieder said pork stocks were bearish for hog futures with a large amount in warehouses consisting of hams stored for use during Thanksgiving and year-end holidays.

About the author


Glacier FarmMedia Feed

Glacier FarmMedia, a division of Glacier Media, is Canada's largest publisher of agricultural news in print and online.

GFM Network News's recent articles


Stories from our other publications