Hog Futures Rise to Three-Week High; Cattle Follow

Hog futures started the week higher, buoyed by an upward turn in the cash market for physical pigs.

Lean hog contracts for December rose 2% to 64.525 cents a pound at the Chicago Mercantile Exchange, closing at the highest point since Nov. 6.

Analysts said steadying cash prices bolstered hog futures. Meatpackers paid higher prices for slaughter-ready hogs three consecutive days last week -- climbing to $57.09 per 100 pounds on Friday -- and were expected to bid mostly steady money on Monday.

That halted four consecutive weeks of falling cash hog prices. Lower kill numbers prompted a buildup of fattened, slaughter-ready hogs waiting to go to processing facilities, giving packers more flexibility to lower prices.

Pork prices were also higher last week, rising to $82.32 per 100 pounds on Friday and climbing further on Monday.

Cattle futures rose on Monday. CME December live cattle contracts rose 1.1% to $1.19825 a pound, with futures for feeder cattle also higher.

Buying interest in the cattle market came from trading patterns that indicated futures had recently fallen too far, said Larry Hicks, owner of CattleHedging.com. The December live cattle contract fell 9% from early November to last week.

Last week's cash prices for cattle were higher than expected. Packers paid an average of $119 per 100 pounds live and $189 dressed, only slightly below a week earlier.

With feedlots fattening large numbers of cattle for slaughter next year, Mr. Hicks said, cash prices were unlikely to surpass highs of around $125 from early November.

"We may have had that high at $125," he said. "Unless weather affects carcass weights, I think we've seen the highs."

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

November 27, 2017 15:34 ET (20:34 GMT)