Cattle futures rose after cash-market prices turned higher this week.
Meatpackers bought cattle for $1.18 a pound live late on Wednesday, up from sales of $1.16 a pound earlier in the day and an average of $1.17 a pound last week.
With traders expecting a growing supply of market-ready cattle to depress prices, the uptick in the cash trade encouraged buying in the futures market on Thursday.
Bids for cattle were "pleasantly on the stronger side," said Dan Norcini, an independent livestock futures trade in Coeur d'Alene, Idaho. "I think that's got some shorts that are pulling out of that market."
Live cattle futures for August delivery at the Chicago Mercantile Exchange rose 0.6% to $1.15225 a pound, the third consecutive day of gains as traders try to align futures with cash levels.
Hog futures were mixed, however, trading mostly lower after a bounce on Wednesday. Wholesale pork prices and the CME lean hog index are at a premium to futures, which had encouraged some bargain hunting this week.
But analysts say the reality of growing hog supplies will continue to weigh on futures going into the fall.
"We don't really have any good news on the hog end, really, to justify that gain," said Rich Nelson, chief strategist at brokerage Allendale Inc. "A rise in supply still should be seen from pretty much now all the way through November for the year's peak."
CME August lean hog futures closed almost unchanged at 81.975 cents a pound, recovering from losses earlier in the session. The most-active October contract fell 1.1% to 65.5 cents a pound, however.
Lower wholesale pork prices on Wednesday and midday Thursday added to the pressure on hog futures. In particular, pork belly prices, which have buoyed the market in recent months, fell sharply on Wednesday.
"There's some signs that maybe end users are beginning to balk at these higher belly prices," Mr. Norcini said. "You're seeing some...push back from producers who are maybe reluctant to chase belly prices up at these record high levels."
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(END) Dow Jones Newswires
August 03, 2017 14:57 ET (18:57 GMT)