Livestock futures inched higher on Thursday, reversing course after a mixed start to the trading session.
Cash prices for cattle so far this week are lower than previous weeks, though they remain at a considerable premium to futures. That's helping to anchor cattle futures and prevent them from falling sharply as the market enters a seasonal slump.
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"There's no doubt that the cash market is starting to come down," said Don Roose, president of brokerage U.S. Commodities in Des Moines, Iowa. "Going through June that's going to be the pattern: The cash comes down more than the futures go up."
The U.S. Department of Agriculture reported live cattle sales for Wednesday of $1.32 a pound on moderate demand in southern states like Texas and Kansas, rising to $1.33 a pound in Colorado. That demand helped to lift futures on Thursday, said Brian Hoops, president of brokerage Midwest Market Solutions in Springfield, Mo.
Live cattle futures for June delivery rose 1.5% to $1.23925 a pound at the Chicago Mercantile Exchange on Thursday. Feeder cattle futures for August delivery also rose.
Analysts said demand for beef appears weaker. Retailers' efforts to secure supply of the meat ahead of Memorial Day weekend pushed prices higher and encouraged packers to raise bids on the cash market, analysts said, though they're now well stocked.
"Retailers have all the beef they need for the coming weekend, and that the high retail price might discourage demand," said Chicago-based forecaster the Hightower Report in a note to clients.
Hog futures also reversed course, closing higher after sliding at the opening. Cash hog prices and pork values, which were lower on Wednesday, starting rising on Thursday morning, according to the USDA.
CME June lean hog futures closed up 0.9% at 80.95 cents a pound. That was a new high for the June contract, and the highest for a front-month contract since July last year.
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(END) Dow Jones Newswires
May 25, 2017 15:03 ET (19:03 GMT)