Hog futures fell over 3%, undoing a rally earlier this week, while cattle futures rose.
Some of the momentum came as traders reversed bets that hog prices would rise and cattle would fall, said Jason Britt, president of Central States Commodities in Kansas City, Mo., by selling their long hog positions and buying out of cattle shorts.
Continue Reading Below
The hog market had started the shortened trading week with a surge as futures closed 3.7% higher, only to give back those gains in the following sessions.
"We had rallied pretty good off those lows," Mr. Britt said of the hog market. "Maybe we got a little overextended."
The underlying fundamentals of the market are still shaky, analysts said, with wholesale pork and cash prices for slaughter-ready hogs both falling this week.
Packers were expected to reduce cash bids for hogs by as much as $2 per 100 pounds on Thursday after prices fell over $1.50 on Wednesday. Pork extended its losses Thursday morning after falling $1.19, to $83.77 per 100 pounds, a day earlier.
Lean hog futures for October delivery fell 3.3%, to 61.45 cents a pound, on Thursday at the Chicago Mercantile Exchange.
CME October live cattle futures, meanwhile, rose 1.5%, to $1.06225 a pound. Unlike in the hog market, traders are betting that cash-market and meat prices are bottoming, analysts said. Wholesale beef prices were higher on Wednesday and steady on Thursday morning.
The cash cattle trade has been slow to get going this week, however. Meatpackers and feedlots have mostly clashed horns over prices. Not many cattle have changed hands since the online Fed Cattle Exchange auction on Wednesday morning, at which 125 head sold for $1.63 a pound on a dressed basis.
Packers were mostly bidding $1.01 to $1.02 a pound live for cattle, analysts said, while feedlots were asking for more. Some cattle traded at $1.03 a pound live and $1.63 a pound dressed in Iowa, along with some $1.63 dressed trade in Nebraska.
Write to Benjamin Parkin at firstname.lastname@example.org
(END) Dow Jones Newswires
September 07, 2017 15:25 ET (19:25 GMT)