Livestock Futures Rise as Dollar Slumps

By Benjamin Parkin Features Dow Jones Newswires

Livestock futures rose Friday as traders bet that a weak dollar would stoke demand for U.S. meat.

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The greenback recently slumped to multimonth lows, helping make American beef and pork cheaper in the global export market. That in turn is creating buying interest from major consumers like China, said Mike Seery, president of Seery Futures, and helping inject strength into an otherwise sluggish commodity sector.

"Commodities are finally starting to bottom," Mr. Seery said. "It looks like the dollar is really trending lower."

Hog futures reversed course Friday after opening lower. Lean-hog futures for June delivery closed 0.4% higher at 79.50 cents a pound at the Chicago Mercantile Exchange, the highest in over three months.

Signs of domestic demand for hogs and pork were mixed, however. Cash prices for hogs slumped by 63 cents to $70.50 per 100 pounds earlier in the day, while pork prices rose 61 cents to $87.01 per 100 pounds.

Cattle futures also gained as traders bet that more resilient cash prices would help limit hemorrhaging after prices retreated from a peak earlier in May. Packers bought 56,000 cattle on Thursday, with the highest going for $1.36 a pound in Nebraska. That was below last week, but analysts said the considerable premium to futures would nevertheless help limit losses for now.

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"We've had one of the biggest rallies in history," said Jim Clarkson, an analyst with A&A Trading on the floor of the Chicago Board of Trade. "Now we're coming off."

CME June live cattle rose 0.4% to $1.2345 a pound.

One factor with potential to change the trend is Chinese appetite for U.S. beef. Traders are keenly watching for signs that Washington and Beijing will make good on an agreement announced earlier this month to lift the Chinese restriction on U.S. beef imports. That has the potential to result in a major boost to demand, analysts say.

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

(END) Dow Jones Newswires

May 19, 2017 15:36 ET (19:36 GMT)