Cattle futures rose on Tuesday even as the supply of cattle grows.
The U.S. Department of Agriculture said on Friday that total cattle-on-feed as of May 1 rose 2% from the same time last year, a larger-than-expected increase. Cattle placement and marketing for the month of April also rose above expectations.
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That weighed on the futures trade on Friday and early Tuesday, combined with lower wholesale beef prices as the Memorial Day weekend grilling boost fizzled out. Wholesale beef prices fell 37 cents to $245.23 per 100 pounds on Tuesday morning.
Analysts said that the continued premium in the cash prices for cattle would limit losses, however, with traders waiting to see how this week's cash trade would develop before betting on price direction in the futures market.
A little over 2,000 cattle are listed at Wednesday morning's online Fed Cattle Exchange auction. That's a smaller show list than last week, at which live cattle averaged at $1.33 a pound. Stable prices at the auction will likely help futures, analysts say.
Live cattle contracts for June delivery opened lower, continuing Friday's sell-off, before reversing course to close 0.2% higher at $1.22975 a pound.
Elsewhere, hog futures fell sharply as pork prices slid. Wholesale pork dropped 33 cents on Tuesday morning to $89.39 per 100 pounds.
CME June lean hog futures fell 1.6% to 80.5 cents a pound.
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(END) Dow Jones Newswires
May 30, 2017 15:33 ET (19:33 GMT)