Cattle Futures Bounce; Hogs Wobble on Nafta Jitters
Cattle futures climbed to the highest close in 11 weeks, supported by rising prices for beef and physical cattle.
Cash prices for slaughter-ready cattle jumped around $3 late last week. Market observers said they expected some of that strength to carry over into this week, particularly after a snowstorm in parts of western and northern cattle country disrupted trade and potentially stressed cattle being fattened in feedlots.
"Numbers of market ready fat cattle seem to be a little snug," said Troy Vetterkind, owner of Vetterkind Cattle Brokerage, adding that he expected showlists of available herds to tighten this week. "We're probably going to see the cash fed cattle market hold together better than previously thought."
Beef prices also rose, partly sparked by the weather disruption to slaughterhouses. Wholesale beef climbed $1.37 to $206.44 per 100 pounds on Tuesday morning, extending gains from Monday.
February-dated live cattle futures rose 1% to $1.24725 a pound at the Chicago Mercantile Exchange, the highest close since Nov. 6.
Hog futures were mixed. The front-month February lean hog contract rose 0.6% to 72.25 cents a pound, while later months fell. The snowstorm also disrupted hog producers and packers, analysts said, temporarily tightening supply.
A new round of negotiations over the North American Free Trade Agreement, or Nafta, begins on Tuesday in Montreal. Renewed concerns that the U.S. will pull out of the deal have recently caused jitters in the U.S. hog market, which exports a significant share of its pork to Mexico and Canada.
Anxiety over Nafta may have contributed to the weakness in deferred-months contract on Tuesday, said Ken Morrison, author of newsletter Morrison on the Markets. The U.S. will have to give six-months notice if it decides to leave the pact, reducing appetite for optimistic longer-term bets.
"It's coming down to crunch time," Mr. Morrison said. "That's got the market spooked a little bit."
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
January 23, 2018 15:07 ET (20:07 GMT)