CME Hog Futures Extend Losses to 8-1/2-month Low, Cattle Down Again
Chicago Mercantile Exchange lean hog futures on Tuesday fell for a third straight session on their way to an 8-1/2-month bottom, pressured by seasonally slumping cash prices and lower wholesale pork values the previous day, traders said.October ended 1.400 cents per pound lower at 60.225 cents, and December finished down 1.425 cents, at 56.150 cents. Packers appear less inclined to raise bids for slaughter-ready, or cash, hogs due to a seasonal bump in supplies and a plant shutdown during the approaching U.S. Labor Day holiday, analysts and traders said. Wholesale pork prices fell on Tuesday after pork belly costs shrank as the summer bacon-lettuce-tomato sandwich season comes to an end after Labor Day, they added. Futures are technically over sold, which may soon stir bargain buying and short-covering ahead of the last trading session for the month of August on Thursday, one trader said. Some investors will also square positions while preparing for the three-day holiday weekend, he added. Live Cattle Futures Retreat CME live cattle futures closed lower on profit-taking after Monday's rally ignited by last Friday's bullish USDA monthly Cattle-On-Feed report. Market losses triggered fund liquidation after October futures slipped below the 10-day moving average of 106.843 cents. August live cattle, which will expire on Thursday, ended down 0.950 cent per pound, at 105.250 cents. Most actively traded October finished 2.275 cents lower, at 106.100 cents. Market participants await this week's sale of market-ready, or cash, cattle against the backdrop of the holiday-shortened work week, Tuesday's improved wholesale beef values and extremely profitable packer margins. Packers have not bid for cattle in Texas and Kansas that were priced at $108 to $110 per cwt. Last week, cattle in the U.S. Plains brought $106 to $107. Wednesday's Fed Cattle Exchange sale of 1,777 animals might set the tone for remaining prices for animals in the U.S. Plains this week. Investors are monitoring developments as Tropical Storm Harvey continues to pound parts of southern Texas with heavy rain, forcing animals to higher ground. Technical selling and live cattle futures losses sank most of the exchange's feeder cattle contracts. August feeders, which will expire Thursday, closed up 0.175 cent per pound at 142.600 cents. Most actively traded September closed 2.850 cents lower, at 143.025 cents, and October finished 2.875 cents lower at 143.525 cents.