U.S. livestock: Profit-taking pressures cattle futures, boosts hogs

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures were mostly lower on Friday while lean hog futures gained sharply as investors took profits in each livestock contract, traders and analysts said.

Cattle fell after Thursday’s nearly four-week high and hogs rebounded from a roughly two-month low.

“It’s just an end-of-the-week rally,” Rosenthal Collins broker James Burns said of hogs.

CME April lean hogs settled 1.45 cents, or 2.4 per cent, higher at 68.025 cents/lb. (all figures US$). The contract still shed almost four per cent for the week, the contract’s biggest weekly loss since December.

Weaker prices both for U.S. cash hogs and wholesale pork weighed on the futures market for much of the week, even as U.S. Department of Agriculture data on Thursday showed tightening supplies of pork bellies that are sliced into bacon.

“Everyone was anticipating the break and we got it, but I think we took it down too hard and oversold it,” Burns added.

Cattle futures had gained for much of the week on the back of higher prices in U.S. Plains cash cattle markets. But prices reversed lower in a technical selloff.

Most-active CME April cattle finished 1.575 cents lower at 114.95 cents/lb., with the decline wiping out what had been a weekly gain.

CME March feeder cattle tumbled nearly 2.7 per cent for their biggest daily losses since Jan. 30, finishing 3.45 cents lower at 121.7 cents per pound.

Traders were squaring up cattle positions in advance of USDA’s monthly Cattle on Feed report released after the close of trading.

The report showed 10.782 million cattle in U.S. feedlots as of Feb. 1. That was 101 per cent of the same period in 2016, nearly equal to analyst estimates for 100.7 per cent.

— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.

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