Cattle futures resumed their losing streak on Wednesday, falling to the lowest close in almost four weeks.
February-dated contracts for live cattle fell 0.7% to $1.16875 a pound at the Chicago Mercantile Exchange, the lowest close since Dec. 14.
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Cattle futures have dropped 5% so far in 2018, pressured by falling cash prices for physical cattle. Forecasts show national slaughter-ready cattle herds growing in early 2018, which is expected to pressure prices in the months to come.
This week's cash trade got started earlier than usual, with feedyards selling their cattle to meatpackers at lower prices on Monday and Tuesday. On Wednesday, packers bought around 400 head of cattle from Kansas for $119 per 100 pounds at the online Fed Cattle Exchange auction. That was at the low end of trade that has mostly hovered around $120 on a live basis and between $191 and $193 on a dressed basis.
The futures market stabilized on Tuesday, as bargain hunters took advantage of the discount to cash prices to buy contracts, before turning lower again on Wednesday.
Rising wholesale beef prices had helped offset some of the pressure. But the beef rally "appears to be running out of gas," said Dennis Smith, a broker at Archer Financial Services. Prices were higher on Tuesday and again on Wednesday morning, but the gains were more modest than some recent sessions.
Hog futures turned lower after hitting a multimonth high. CME February lean hog contracts slid 0.9% to 72.525 cents a pound. Prices have bumped up against selling pressure around those levels, analysts said, with chart patterns signaling to some traders that the market had reached a temporary top.
But the underlying physical hog market continued to track higher, with prices rising steadily to meet with futures levels. Cash prices rose over $2 to $67.56 per 100 pounds on Tuesday, and market observers expected prices to continue trending higher on Wednesday.
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(END) Dow Jones Newswires
January 10, 2018 15:28 ET (20:28 GMT)