Hog futures fell sharply as traders locked in profits on a multi-day rally this week.
October lean hog contracts at the Chicago Mercantile Exchange fell 2.9% to 59.175 cents a pound. Prices were still up almost 7% for the week.
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Analysts said Friday's selling was driven in part by bets that the futures market was out of step with cash prices for slaughter-ready hogs. The October contract was above average cash prices and the CME Lean Hog Index, which tracks the cash market.
Both the index and the October contract should converge when the latter expires this month. Despite strong recent gains in the cash market, analysts said, traders bet futures would have to fall in order to meet the index.
Estimated hog slaughter numbers this week were largely steady from a week earlier at 2.524 million head, the U.S. Department of Agriculture said. Growing processing capacity is expected to push that number higher in the coming months.
Cattle futures, meanwhile, were higher on Friday. CME October live cattle futures rose 0.8% to $1.11025 a pound.
The bulk of the week's cash trade hadn't happened as of Friday morning, analysts say, as meatpackers and feedyards continued to haggle over prices for cattle.
Supplies of slaughter-ready cattle rose this week, but early trading suggested that prices would be mostly steady from a week earlier. Meatpackers have largely paid $108 per 100 pounds live so far this week, though a few hundred head of cattle traded in the western Corn Belt for $110 on Thursday, the USDA said.
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(END) Dow Jones Newswires
October 06, 2017 15:19 ET (19:19 GMT)