Cattle futures undid early losses to close largely unchanged, supported by technical factors and steady beef prices.
Wholesale beef has inched higher this week, pausing several weeks of losses. That has traders betting the broader cattle-and-beef market could stabilize in the weeks to come. A pound of beef rose to $1.9177 a pound on Tuesday, and was higher as of midday Wednesday.
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Futures initially fell before bouncing off the bottom of a recent trading range. Live cattle futures have largely traded within that band through late August. October-dated live cattle contracts pared early losses to close little changed at $1.06125 a pound.
Prices in the week's cash market continued to slide, however, after kicking off the online Fed Cattle Exchange auction on Wednesday morning. Meatpackers bought 1,140 head at an average of $1.66 a pound for dressed cattle from Nebraska and $1.05 a pound for live Kansas cattle. The U.S. Department of Agriculture also reported Nebraska sales of $1.65 to $1.66 a pound dressed.
Those prices are several cents lower than last week, when live sales in Kansas averaged $1.07 a pound and Nebraska dressed trade came in at $1.69. Still, analysts say the cattle market should be approaching a seasonal bottom. Packer margins are currently increasing, with the HedgersEdge index almost doubling in two weeks to $115.85 a head. That will give them more money to spend on slaughter-ready cattle when futures stabilize, analysts say.
Traders also continue to monitor the fallout of Tropical Storm Harvey in southeastern Texas to gauge the extent of livestock losses. There were approximately over a million cows in affected counties, according to the Steiner Consulting Group, though local industry representatives said many ranchers had time to move their herds to higher ground before the flooding.
Hog futures also bounced.
CME October lean hog contracts rose 1.9% to 61.35 cents a pound, clawing back some of the losses from earlier this week.
Though pork belly prices continue to fall, losses eased as of midday Wednesday after falling sharply earlier this week.
Analysts say hog prices are due for a seasonal low.
Write to Benjamin Parkin at firstname.lastname@example.org
(END) Dow Jones Newswires
August 30, 2017 15:21 ET (19:21 GMT)