Livestock futures were mixed in a quiet session on Friday, as cattle and hog contracts consolidated after some recent losses.
Lean hog futures for July delivery rose 0.3% to 82.325 cents a pound, recovering from a selloff on Thursday as hot weather in key states like Iowa continues to limit hog weight-gain. But contracts for delivery in October and December fell, as traders bet growing supplies will keep prices down later this year.
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"Right now you have two separate markets," said Jim Burns, a broker with Rosenthal Collins Group in Chicago, referring to competing short- and long-term pressures on the hog trade. "We know there's a lot of hogs coming. Seasonally they're due a corrective phase. Near term, we have some heat in the Midwest which is keeping weights down."
Wholesale pork prices were also supportive, rising 0.74 cents to 94.97 cents a pound in the morning. That's expected to help firm cash prices too.
Cash prices in the cattle market turned sharply lower this week, however, with the U.S. Department of Agriculture reporting on Friday morning average sales of $1.25 a pound for Thursday. That was down 10 cents a pound from the previous week, as growing supplies allow packers to lower their bids.
Lower cash market sales resulted in heavy selling in cattle futures this week. The number of contracts bought and sold dropped off on Friday from Thursday, as traders locked in profits before the weekend.
CME June live cattle futures fell 0.7% to $1.217 a pound, while later month contracts rose. CME August feeder cattle futures were 0.5% higher at $1.47875 a pound.
Mixed beef prices exacerbated the recent weakness in the cattle market, which have faltered recently after soaring to the highest in months last week.
"The tone, attitude and expectations for wholesale beef moving forward have weakened dramatically," Dennis Smith, a broker at Archer Financial Services in Chicago, said in a note to clients. "Packers are well ahead of the curve having secured inventory at sharply lower levels. It appears that Fourth of July demand has been met."
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(END) Dow Jones Newswires
June 16, 2017 15:13 ET (19:13 GMT)