Hog futures fell sharply as traders bet a recent run-up had come to an end.
Hog contracts trended upward through much of this year, hitting multiyear highs in early July on the back of strong demand for pork meats like bacon. But a drop in pork prices on Thursday had futures traders rolling out of optimistic positions on Friday.
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"We've been in a bullish trend the entire year," said Mike Seery, president of brokerage Seery Futures in Plainfield, Ill. "It's time to sell."
CME August lean hog futures fell 3.2% to 79.9 cents a pound at the Chicago Mercantile Exchange, the lowest close in a little over two weeks.
Wholesale pork prices had regained some ground as of midday Friday, rising 1.2 cents to almost $1.05 a pound. Analysts say prices have likely peaked, however.
"A lot of people took that as a warning shot," said Dan Norcini, an independent livestock trader in Idaho.
Cattle futures, however, rose despite pressure from external markets. Sharp selling in grain futures this week supported the market, making it cheaper for feedlots to fatten their cattle. But grain prices turned higher on Friday.
Still, an unexpectedly higher cash cattle trade this week has given the futures market a boost. Cattle traded on Thursday for an average of $1.199 a pound live and $1.901 a pound dressed, according to the U.S. Department of Agriculture. Analysts said the trade was likely done for the week.
"The surprisingly higher cash fat cattle market this week will have most in the industry looking for another higher market next week," said Troy Vetterkind, president of Vetterkind Cattle Brokerage in Thorp, Wis., referring to herds that are ready for slaughter.
CME August live cattle futures rose 0.3% to $1.178 a pound while August feeder cattle rose 0.8% to $1.54275 a pound.
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(END) Dow Jones Newswires
July 14, 2017 15:13 ET (19:13 GMT)