Cattle futures started the week mixed as a cash-market rally lent some support to prices.
Physical cattle prices rose unexpectedly on Friday, with meatpackers around the country paying between $118 and $120.50 per 100 pounds on a live basis, above the prior week's level and defying expectations for a decline. Sales over the course of the week averaged at $119.66 live and $188.96 dressed.
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That prompted futures traders to push the front-month December contract up to similar levels when markets reopened on Monday. The contract closed 0.9% higher at $1.19975 a pound at the Chicago Mercantile Exchange, the highest in over two weeks.
Contracts for later months fell, however, as analysts cautioned that the cash-market boost was insufficient to stave off longer-term supply pressure. Most-active CME February futures fell 0.4% to $1.206 a pound.
Beef production is expected at a record next year, while a stream of government reports have shown increasing numbers of cattle being fattened for slaughter in the first half of 2018. The U.S. Department of Agriculture is due to release updated figures later this week.
Analysts said they expected renewed pressure on the cash market this week as packers wind down slaughter operations and demand for beef eases. Retailers have already secured their supplies of beef for the holidays, they said.
Wholesale beef prices rose $1.36 to $203.23 per 100 pounds at midday Monday, adding to gains from Friday.
Hog futures fell. The front-month February contract slid 1.6% to 67.4 cents a pound, while later months were also lower.
Market observers said that cash-market prices for hogs were expected to continue trending lower early this week.
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(END) Dow Jones Newswires
December 18, 2017 15:39 ET (20:39 GMT)