Livestock Futures Rise; Meat Supplies Grow in 2018
13 January 2018 - 9:01AM
Dow Jones News
By Benjamin Parkin
Livestock futures turned higher after a week punctuated by
selloffs.
The hog market was rocked earlier this week by renewed tensions
over the North American Free Trade Agreement, or Nafta, after
Canada filed a complaint with the World Trade Organization over the
Trump administration's use of tariffs.
But futures steadied on Friday, helped by rising physical hog
prices. Meat-packers are on track to increase their prices for hogs
for three consecutive weeks. The price increases are caused by a
number of factors, including frigid weather that slowed the rate of
hog weight gains and increased competition among packers due to
added slaughter capacity.
Cattle futures, meanwhile, started the week sharply lower but
have since steadied. Cash prices for physical cattle are on track
to fall for two consecutive weeks. With large supplies of cattle
being fattened in the nation's feedlots for slaughter in the first
half of this year, analysts expect the pressure on the cash market
to continue.
Hog futures for February delivery rose 0.9% to 71.575 cents a
pound at the Chicago Mercantile Exchange. February-dated live
cattle contracts rose 0.3% to $1.17375 a pound, lower over the
week.
The U.S. Department of Agriculture on Friday increased its
forecast for red meat and poultry production in 2018 to a new
record. The agency expects production of red meat, which includes
beef and pork, to rise to 55.033 billion pounds from 52.071 billion
in 2017.
Analysts say offsetting a glut will require rock-solid demand,
both domestically and abroad. Per-capita consumption and exports of
both beef and pork are due to rise in 2018 from a year earlier, the
agency said, with overall red meat and poultry consumption at a
record.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
January 12, 2018 16:46 ET (21:46 GMT)
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