Cattle futures rose Friday on the back of higher-than-expected cash-market prices.
Meatpackers paid $108 per 100 pounds live for cattle in Kansas and Texas, several dollars above the previous week. Packers elsewhere raised their bids to $108 live and $170 to $172 dressed, market participants said, after holding out for lower prices through much of the week.
Analysts said the unexpected increase in cash bids suggested that packers were tighter on inventory of slaughter-ready cattle than previously thought. A higher trend this week would likely help solidify a cash-market turnaround, with prices bouncing from lows of around $104 earlier in September.
October live cattle futures rose 1.3% to $1.11575 a pound at the Chicago Mercantile Exchange, the highest close in over six weeks.
Hog futures were sharply lower, pressured by downward momentum in the cash market. Meatpackers are slaughtering record numbers of hogs after two new processing plants opened earlier this month. Analysts say demand, particularly from exports, hasn’t increased to absorb the extra pork supply, which is prompting declines in spot hog and meat prices.
Wholesale pork fell $3.28 to $73.04 per 100 pounds on Thursday before inching higher at midday Friday, with cash prices expected to continue falling this week
Analysts see few bright spots in the near term.
“Packers are in a take no prisoners mode, smacking the cash lower now for four straight weeks,” said Dennis Smith of Archer Financial Services. “There’s also nothing good to report in the product… prices continue to erode under the weight of record large production.”
CME October lean hog futures fell 2.8% to 55.7 cents a pound.
Soybean and corn futures bounced Friday on strong export demand and a weaker dollar.
The U.S. Department of Agriculture said that private exporters sold 190,000 metric tons of soybeans to Mexico for 2017-18, capping off a week of bumper export sales of American oilseed. Sales this week were on a near-record pace, said Arlan Suderman of INTL FCStone Inc.
A lower dollar also prompted bets that cheaper U.S. crops would continue to attract international demand. The WSJ Dollar Index, which measures the U.S. dollar against a basket of currencies, fell 0.13% to 85.50 on Friday afternoon after hitting a low of 85.31 in the early morning.
That helped push soybean futures just short of an eight-week high. Analysts said they passed through various technical resistance points, including the 200-day moving average near $9.785 a bushel. November contracts closed 1.4% higher at $9.84 1/4 a bushel at the Chicago Board of Trade.
Corn futures also rose, helped higher by hedge-fund interest in the soybean rally, analysts said. CBOT December corn contracts rose 0.9% to $3.53 1/2 a bushel. December wheat futures fell 0.7% to $4.49 1/2 a bushel.
Oil prices wobbled between small gains and losses Friday after the Organization of the Petroleum Exporting Countries and its allies didn’t make a recommendation on whether the group should extend its oil cuts.
Light, sweet crude for November delivery edged up 11 cents, or 0.2%, to $50.66 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, inched up 0.8% to $56.86.
Gasoline futures rose 1.5% to $1.6684 a gallon, and diesel futures advanced 0.1% to $1.8163, posting their highest close since July 2015. Diesel futures have risen in five straight weeks.
Natural gas prices edged higher Friday following their worst day in more than six months.
Futures for October delivery gained 1.3 cents, or 0.4%, to $2.9590 a million British thermal units on the New York Mercantile Exchange.
Prices tumbled 4.8% Thursday in their largest one-day decline since late February after the latest U.S. Energy Information Administration report showed inventories grew more than expected for the second straight week.
Wall Street closed the week mixed. The Dow lost 10 points to close at 22349 while the S&P 500 was up a point at 2502 and Nasdaq gained 4 to 6427.