Livestock Futures Slide as Sell-Off Continues

By Benjamin Parkin Features Dow Jones Newswires

Cattle futures fell on Thursday as traders bet a recent rally had reached a top.

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Rising beef prices and lower-weight cattle have not been enough to stave off selling in the cattle market, with futures falling around 9% from a week ago.

"Traders are more and more convinced that a major peak is in place," said forecaster the Hightower Report in a note, adding that high beef prices may scare consumers away.

Live cattle futures for June delivery fell 0.2% to $1.23925 a pound at the Chicago Mercantile Exchange. Feeder cattle futures also closed lower.

Part of the selling was fueled by lower prices in this week's cash trade. Packers paid an average of $1.38 a pound in Wednesday's market, down from $1.45 a week ago.

But wholesale beef prices nevertheless continued to gain, rising to $2.47 a pound on Thursday. Analysts said beef is at the highest level since August 2015.

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The combination of falling cash prices and rising beef values has sent beefpacker margins shooting into the black. That could give them more flexibility to raise bids on the cash market next week, said Brian Hoops, president of brokerage Midwest Market Solutions.

Hog futures also slid on Thursday, with CME June lean hog futures closing down 0.2% at 77.05 cents a pound.

Packers continued to pay more for hogs on the cash market, which is at a discount to futures. Sales were expected as much as $2 higher per 100 pounds in Thursday's trade.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

May 11, 2017 15:45 ET (19:45 GMT)