Livestock futures traded sideways on Monday.
Prices for hogs and cattle fell last week as traders faced a plentiful supply outlook in the coming months. But futures markets were mixed on Monday, steadying as bargain-hunting traders took advantage of discounted prices.
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December lean hog futures at the Chicago Mercantile Exchange fell 0.3% to 62.3 cents a pound, while contracts for later months rose.
Falling physical hog prices have burdened the swine market. Cash prices dropped almost 10% from a late October peak, and market observers expected them to slide further on Monday.
The downturn came as meatpackers slowed the rate of hog slaughter, leading to a backlog of slaughter-ready herds that producers needed to offload at a discount. That in turn helped bolster processing margins that had previously fallen.
Packers have not slaughtered as many hogs as suggested by the most recent U.S. Department of Agriculture inventory survey, the Steiner Consulting Group said in a note.
"It could be that the survey told us there were more hogs on the ground than there really were but it could also be that the margin squeeze has caused packers to slow down the kill," the consultancy said.
Packers increased the slaughter rate last week, killing 2.495 million hogs. That was still below levels implied by the survey, Steiner said. Market observers also expected Monday's kill number to rise from a week earlier to 465,000 head.
The cattle market was also under some pressure. CME December live cattle contracts closed unchanged at $1.20575 a pound. Later months fell.
Cattle futures tumbled last week after cash prices came in below expectations. Meatpackers last week mostly paid $124 per 100 pounds live in the southern Plains, with prices ranging from $122 to $124 in Nebraska and Colorado. Dressed cattle prices were mostly between $190 and $192.
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(END) Dow Jones Newswires
November 13, 2017 15:41 ET (20:41 GMT)