Livestock Drops As Market Prepares For Summer Lull
27 June 2017 - 8:51PM
Dow Jones News
By Julie Wernau
Livestock futures ended lower Tuesday following Monday's limit
up day in the cattle market. The market is now preparing for a
seasonal lull that typically occurs after July 4th weekend as meat
demand dies down.
CME live cattle for June was off 1.5% at $1.196 a pound and lean
hogs for July fell 0.6% to 86.475 cents a pound.
Dennis Smith at Archer Financial Services in Chicago advised
clients to look for a seasonal high in August and October futures
contracts either late this week or early next week.
"For now, people want their pork chops and their bacon. The
million dollar question is, will they continue at these higher
levels?" said Steve Wagner at brokerage CHS Hedging in
Minnesota.
Mr. Wagner said the limit up move in cattle on Monday was short
covering by traders who'd been awaiting a bearish signal beyond
news that a large number of cattle are in feedlots.
Instead, they were seeing solid demand for boxed beef and solid
exports, along with stockpiles dwindling in cold storage.
Cash prices will now determine what happens in the June
contract. With cash prices last week at $119 to $124 and slow cash
trade so far this week leading in to the expiry, a further slump in
cash versus the futures could cause deliveries against the
futures.
Archer Financials say most in the trade are expecting a steady
to lower cash steer market this week. The firm said packers want to
boost cattle weights and are slowing because they don't want to
process light weight cattle.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
June 27, 2017 15:36 ET (19:36 GMT)
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