Cattle futures fell, giving back early gains as growing supplies weighed down prices.
Market observers said more cattle on feed are reaching slaughter size, meaning a larger supply of fattened animals ready for processing into beef. That is allowing meatpackers to lower bids and push cash prices lower for physical cattle.
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Cash prices this week were due to fall, analysts said. Packers bought one lot of 75 cattle from Kansas for $116 per 100 pounds at the online Fed Cattle Exchange auction on Wednesday morning, at which a little over 700 head were listed. Elsewhere, packers were mostly bidding $114 on a live basis. Last week, live prices averaged $117.50 and dressed averaged $187.
December-dated live cattle futures fell 0.4% to $1.1565 a pound at the Chicago Mercantile Exchange on Wednesday, after opening higher. Prices rose on Tuesday for the first time after eight consecutive sessions lower.
Demand for beef ahead of the holidays wasn't keeping pace with growing supplies of beef, analysts said. Wholesale beef prices fell $1.05 to $203.01 per 100 pounds as of midday Wednesday, extending losses from a day earlier.
"After eight consecutive days of losses the cattle futures market finally came up for air," said Troy Vetterkind, owner of Vetterkind Cattle Brokerage, in a note. "It was probably nothing more than a 'dead cat' bounce but much needed nonetheless... A sustainable rally will be tough to hold until we get past the first of the year."
Hog futures rose, despite pressure on both cash and meat prices. CME December lean hog contracts gained 0.3% to 63.95 cents a pound.
Wholesale pork prices tumbled almost $5 per 100 pounds as of midday, led by a sharp drop in pork belly prices. Bellies, used to make bacon, fell $16.34 to $107.24.
Low belly stocks helped push prices to records earlier this year. But stocks have regrown because of higher slaughter numbers, forcing belly prices lower.
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(END) Dow Jones Newswires
December 13, 2017 16:01 ET (21:01 GMT)