Cattle futures extended their highs on Thursday, building on the momentum of an active cash market earlier this week.
After a recent slowdown in the cash trade, sales between packers and feedyards took an upturn on Wednesday. Cattle sold for between $1.30 and $1.32 a pound in southern states, with a few more sales at $1.33 further north.
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That gave futures traders incentive to continue rallying prices to meet cash levels. April live cattle futures opened sharply higher, edging above $1.30 a pound before closing up 1.3% at $1.29625 a pound at the Chicago Mercantile Exchange. That was the 11th consecutive day of gains, pushing prices up to the highest close since April 15 last year.
Underlying beef demand supported the rally. The U.S. Department of Agriculture reported an increase in beef export sales on Thursday morning, while the price of wholesale beef also ticked higher. Analysts said that supported the bull market in cattle prices.
Higher pork export sales, which rose almost 50% above their 4-week average, had little impact on the futures trade though.
CME June lean hog futures fell 1.8%, to 68.675 cents a pound. Futures prices have fallen sharply this week.
Large hog supplies are giving packers the bargaining power to continue depressing prices on the cash market, analysts said, which is in turn weighing on the futures trade. Cash hog prices fell to 54.07 cents a pound on Wednesday, marking the 21st straight day of decline.
But futures may be approaching a short-term low, said The Hightower Report in a note to clients, with wholesale pork prices firmer and packer margins wide. Pork carcasses were $74.55 cents per 100 pounds on Wednesday, a slight increase from $74.31 the previous week.
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(END) Dow Jones Newswires
April 20, 2017 15:08 ET (19:08 GMT)