Hog Futures Rise to Three-Week High; Cattle Follow

By Benjamin Parkin Features Dow Jones Newswires

Hog futures started the week higher, buoyed by an upward turn in the cash market for physical pigs.

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Lean hog contracts for December rose 2% to 64.525 cents a pound at the Chicago Mercantile Exchange, closing at the highest point since Nov. 6.

Analysts said steadying cash prices bolstered hog futures. Meatpackers paid higher prices for slaughter-ready hogs three consecutive days last week -- climbing to $57.09 per 100 pounds on Friday -- and were expected to bid mostly steady money on Monday.

That halted four consecutive weeks of falling cash hog prices. Lower kill numbers prompted a buildup of fattened, slaughter-ready hogs waiting to go to processing facilities, giving packers more flexibility to lower prices.

Pork prices were also higher last week, rising to $82.32 per 100 pounds on Friday and climbing further on Monday.

Cattle futures rose on Monday. CME December live cattle contracts rose 1.1% to $1.19825 a pound, with futures for feeder cattle also higher.

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Buying interest in the cattle market came from trading patterns that indicated futures had recently fallen too far, said Larry Hicks, owner of CattleHedging.com. The December live cattle contract fell 9% from early November to last week.

Last week's cash prices for cattle were higher than expected. Packers paid an average of $119 per 100 pounds live and $189 dressed, only slightly below a week earlier.

With feedlots fattening large numbers of cattle for slaughter next year, Mr. Hicks said, cash prices were unlikely to surpass highs of around $125 from early November.

"We may have had that high at $125," he said. "Unless weather affects carcass weights, I think we've seen the highs."

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

(END) Dow Jones Newswires

November 27, 2017 15:34 ET (20:34 GMT)